M. B. SHAH, J. ( 1 ) THE petitioner-The Gujarat Agro Industries Corporation Ltd. Ahmedabad has filed this petition praying that direction given by the Superintendent of the Central Excise Ahme- dabad by Annexure E dated 14/04/1980 be quashed and set aside. As per the said direction the petitioner was directed to apply for Central Excise Licence and to clear the goods after pay- ment of Central Excise on the basis that the petitioner was producing compost manure which was excisable and chargeable to Central Excise duly under Tarriff Item 68. ( 2 ) IT is the say of the petitioner that the petitioner is a Corporation registered under the Companies Act and 51 % of its shares are owned by Central Government and 49% of its shares are owned by the State Government. To solve the problem of disposal of garbage in the City of Ahmedabad it was decided that the garbage received from the city and nearby places can be used as compost manure after subjecting the said garbage to natural process. This was on the basis of the Government of Indias order to promote production of compost manure all throughout the nation and to solve the problem of disposal of garbage in big cities. ( 3 ) IT is the say of the petitioner that the petitioner is not producting or manufacturing any new product. The only process which the petitioner does is to collect the garbage. Thereaf- ter iron particles are magnetically separated from the refuse and objectionable articles are manually picked up. The remaining garbage is reduced to small particle size by relating it in a drum. From that garbage large size of particles the small pebbles and stones are removed. Subsequently the powdered like material which has appearances similar to used tea-dust will be placed in open-to-sky condition for 8 to 10 weeks for natural fermentation. During this period the material is turned upside down 4/5 limes depending upon the temperature and at the end of this period the fermentation and decaying process due to natural factors is over and that refuse is sold as compost manure. ( 4 ) IT is the further say of the petitioner that the petitioner has installed the compost manure plant in December 1975. It was incurring cost of Rs. 130. 00to Rs. 150. 00per ton and was selling the compost manure at the price of Rs. 25. ( 4 ) IT is the further say of the petitioner that the petitioner has installed the compost manure plant in December 1975. It was incurring cost of Rs. 130. 00to Rs. 150. 00per ton and was selling the compost manure at the price of Rs. 25. 00 to Rs. 30 per ton. Every year there was heavy loss. The learned Advocate for the petitioner has submitted that because of heavy losses the petitioner has decided in the year 1983 to discontinue the said plant to avoid further losses and then the plant is closed. ( 5 ) AT the time of hearing of the matter Mr. Thakkar learned Advocate appearing on behalf of the petitioner raised the following contentions: (1) The process involved in using garbage as compost manure cannot be said to be manufac- turing process as defined under Section 2 (f) of the Central Excise Act and therefore the com- post manure produced by the petitioner would not be excisable goods. (2) In any set of circumstances even if it is considered to be manufacturing process yet it is exempt from excise duty because of Notification No. 179/77 dated 18/06/1977 issued by the Central Government in exercise of its powers conferred by sub-rule (1) of Rule 8 by which it has granted exemption to all goods falling under Item 68 of the First Schedule to Central Excises and Salt Act 1944 in relation to manufacture of product in which no process is ordinarily carried on with the aid of power from the whole of the duty of excise leviable thereon. (3) Assuming for the time-being that it was excisable goods yet under Tariff Item 14hh there was specific exclusion for natural animal or vegetable fertilizers when not chemically treated. Therefore it cannot be covered by Tariff Item 68. ( 6 ) IT should be noted that no Affidavit-in- reply filed denying the facts averred by the peti- tioner in this petition. Hence the contention of the petitioner is required to be accepted that the process carried out by the petitioner is without the aid of power is required to be accepted. It is not denied that compost manure is produced because of fermentation and decaying process due to natural factors as it is kept in open-to-sky condition for 8 to 10 weeks for natural fermentation. It is not denied that compost manure is produced because of fermentation and decaying process due to natural factors as it is kept in open-to-sky condition for 8 to 10 weeks for natural fermentation. Therefore on the basis of the facts on record as on to-day it can be said that the process which is carried on by the petitioner for the production of compost manure is without the aid of power and it is due to natural process which turns garbage into compost manure. Hence the petitioners product would be covered by Notification No. 179/77 dated 18/06/1977. It reads as under :in exercise of the powers conferred by subrule (1) of Rule 8 of the Central Excise Rules 1944 the Central Government hereby exempts all goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act 1944 (I of 1944 in or in relation to the manufac- ture of which no process is ordinarily carried on with the aid of power from the whole of the duty of excise leviable thereon. Further by Exemption Notification No. 181/ 80 dated 12/11/1980 compost manure is exempted from payment of excise duty. The said notification reads as under: in exercise of the powers conferred by subrule (1) of Rule 8 of the Central Excise Rules 1944 the Central Government hereby makes the following further amendment in the notifi- cation of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 55/75 - Central Excise dated the 1/03/1975 namely : in the Schedule annexed to the said notitfication after Item No. 27 the following item shall be inserted namely :28 Compost manure. ( 7 ) BY Notification No. 55 of 1975 Central Excise dated 1/03/1975 the Central Government has exempted goods of the descriptions specified in the Schedule annexed with it and falling under Item. No. 68 of the First Schedule to the Central Excises and Salt Act 1944 from the whole of the duty of excise leviable thereon. Compost manure is included by the notification dated 12-11-80. Hence after 12-11-80 there is no question of taking any excise duty from the petitioner on compost manure produced by it under Tariff Item 68. Further at the relevant time fertilizers were covered by Tariff Item 14hh. Compost manure is included by the notification dated 12-11-80. Hence after 12-11-80 there is no question of taking any excise duty from the petitioner on compost manure produced by it under Tariff Item 68. Further at the relevant time fertilizers were covered by Tariff Item 14hh. It specifically provided for fertilizers all sorts but excluding natural animal or vegetable fertilizers when not chemically treated. The said Tariff Iem reads as under : 14 Fertilizers all sorts but excluding natural animal or vegetable fertilizers when not chemically treated. There is noting on record to show that garbage used by the petitioner for producing compost manure is any way chemically treated. It is the say of the petitioner that it is natural animal and vegetable fertilizers because of decaying process of garbage. Therefore the petitioners product is specifically excluded by the said Item. In spite of this specific exclusion from the payment of ex- cise duty the Superintendent of Excise has issued direction to the petitioner to obtain Central Ex- cise Licence and to clear the goods after the payment of central excise duty at appropriate rate under Tariff Item 68 by its letter dated 14/04/1980. In our view once the product is specifically excluded from the main item then there is no question of applying residuary item. The residu- ary Item 68 specifically provides the items which are not elsewhere specified. If elesewhere it is provided and there is specific exclusion of the Item then it cannot be covered by the residuary item. The residuary Item 68 prior to its amendment in 1980 was as under :- item No. 68 - ALL OTHER GOODS N. E. S. @@@ Item No. Tariff Description Rate of duty 68 All other goods Eight not elsewhere specified per cent but excluding ad valoram. (a) xx xx xx (b) xx xx xx (c) xx xx xx by amendment dated 18-6-1980 Explanation is added which reads as under :-EXPLANATION. For the puposes of this Item goods which are referred to in any preceding Item in this Schedule for the purpose of excluding such goods from the description of goods in that Item (whether such exclusion is by means of an Explanation to such Item or by words of exclusion in the description itself or in any other manner ) shall be deemed to be goods not specified in that Item. The effect of this residuary item was considered by the Supreme Court in the case of Dunlop India Ltd. v. Union of India A. I. R. 1977 Supreme Court 597 wherein it has been observed as under :when an article has by all standards a reasonable claim to be classified under an enu- merated item in the Tariff Schedule it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classifications will however stand on a different footing. FURTHER in the case of Darshan Hosiery Works v. Union of India 22 G. L. R. 533 the Division Bench of this Court has specifically held that the Item 68 would not be applicable when there is specific exclusion in the main items. The Court dealt with Item 22d as it was wherein articles of hosiery in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power were excluded. The Court held that the expression not elsewhere specified in Item 68 means not elsewhere specified either for the purpose of taxability or for the purpose of exemption. In order to attract Item 68 there must be a total omission of specification of goods in any of the items preceding Item 68. Hence as there was specific exclusion of natural animal or vegetable fertilisers when not chemically treated in Item 14hh it cannot be covered by residuary Item 68. ( 8 ) HOWEVER it is required to be clarified that in view of Explanation added to Tariff Item 68 by Finance Act No. 2 even the goods which are referred to in any tariff item for the purpose of excluding it from that item would be covered by the residuary Item 68. By Explanation deeming provision is made and the expression All other goods not elsewhere specified is given a specific meaning. The phrase All other goods not elsewhere specified would include or would also be applicable to the goods which are referred to in any item in the First Schedule for the purpose of excluding such goods from the description of goods in that item. The phrase All other goods not elsewhere specified would include or would also be applicable to the goods which are referred to in any item in the First Schedule for the purpose of excluding such goods from the description of goods in that item. It would also cover the goods which are excluded by an Explanation to such Item or by words of exclu- sion in the description itself or in any other manner. Therefore from the date of addition of Explanation in Item 68 even natural animal or vegetable fertilisers when not chemically treated would be covered by Item 68 even though there is specific exclusion in Item 14 At present we are not required to deal with that question further because by Exemption Notification dated 12/11/1980 compost manure is exempted from payment of excise duty. ( 9 ) IN the result this petition is allowed. The direction given by the Superintendent of Central Excise AR XIII Dn. III Ahmedabad by his letter dated 14-4-1980 to take Central Excise Licence and to clear the goods after payment of Central Excise duty at appropriate rate on the basis of Tariff Item 68 for petitioners product compost manure is quashed and set aside. Rule made absolute to the aforesaid extent with no order as to costs. .