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TMI Blog1983 (6) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... s list was returned by the concerned Inspector intimating the company that this view was not acceptable to the Department and that this product was leviable to excise duty under Tariff Item 68. The Company was accordingly required to file a fresh Classification List, to which the Company complied, though under protest. Thereafter, without raising any dispute about the classification, independent of the protest, expressed while filinga revised Classification List under directions of the concerned Inspector, the Company applied for refund of the duty paid at the rate of 5% ad valorem on the aforesaid yarn, covering the period 28-4-1978 to 30-9-1978, and the amount was computed to be ₹ 84,651.77. 3. It was this refund claim which was disallowed by the Assistant Collector, on the view that since the Company had not disputed the classification, as conveyed to them by way of appeal; they would be deemed to have accepted the said classification as determined by the Department, and so the Central excise duty was rightly levied and collected and their refund claim was liable to rejection. 4. The Company carried an appeal against this order to the Appellate Collector, pleading th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the specific categories, namely 18, 18A, 18B, 18C, 18D, 18E and 18F, and this being a type of yarn not specified under any of the Tariff Items, has been rightly taken to be falling under the residuary Item 68. The Appellate Collector further held that a new product, as known to the market, had clearly emerged and that the process of manufacture was doubling as well as twisting of different varieties of yarn, which were plain single yarn, and that since this double twisted yarn did not fall under any of the categories enumerated in the Tariff Items 18 to 18F, the classification of this new product of `fancy yarn , had been rightly done under Tariff Item 68. The appeal was accordingly dismissed. 6. Feeling aggrieved by this dismissal, the Company filed a Revision Petition before the Central Government, reiterating the plea that no manufacturing process was involved and that the end-product was still a yarn and since it has come into existence as a result of doubling or twisting of duty paid yarns, the lower authorities had erred in treating it as an excisable item and that the basic question which had not been appreciated was that the process did not amount to `manufacture . Ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the facts stated, this affidavit was admitted on record, and then the Bench proceeded to hear arguments on merits. 9. Shri Ravinder Narain commenced his arguments by contending that there was a clear error in the observations of the Appellate Collector that the yarn in question was a `fancy yarn , and that, in trade parlance what was known as `fancy yarn had entirely different characteristics and appearance, and further argued that the disputed end-product still remained a yarn and was not a different commodity so as to be taken to the residuary item, particularly when both the component yarns were already duty paid. He also made pointed reference to the Delhi Cloth General Mills and the South Behar Sugar Mills cases to highlight distinction between a mere `process and `manufacture and also to an English Bench decision known as Mcnicol and Another v. PINCH in the King s Bench Division case reported in Law Reports, 1906, Vol. 6 at p. 352 where it was held that saccharine which was the basic product, was, though made of greater concentration, would still remain saccharine and no new process could be said to have been involved. The learned Counsel further referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this yarn, it has been rightly held to be classifiable under Tariff Heading 68 - not being covered by any other specific entry pertaining to yarns. 12. Learned Counsel for the appellants addressed some further arguments in rejoinder by highlighting the fact that the subject yarn had been prepared out of duty paid yarns and that it was not a case where no duty had been absolutely paid, and that same commodity ought not be assessed again to excise duty, and that in any case the `added value test had to be kept in mind and credit for duty already paid on the polyester yarn, allowed. He also referred to the case of J.K. Synthetics and reiterated that where some independent manufacturing process was involved, only then a distinct commodity as known to the trade could be deemed to have come into existence and not yarn of the variety and type produced by them. 13. We have given our very careful and anxious thought to the arguments canvassed by the learned Counsel for the appellants and we appreciate the lucid exposition by him, of the points involved but we cannot persuade ourselves to accept his contentions. It is an admitted position on facts that different yarns as covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any technical literature to the effect that the term `fancy yarn is restricted only to effects as described in the appeal, such as crimping and looping etc. and that this expression could not be extended to the twisted yarn of the type, being produced and marketed by the appellants. 17. For the same reason, the English case of saccharine is also distinguishable because that was a case where licence was required to be obtained for the purpose of manufacture of saccharine, and the party in that case had obtained the same for producing 330 saccharine . What was found was that saccharine of a higher concentration or intensity had been produced, which was saccharine 550 and it was in those circumstances and facts of the case that it was held that what was being produced in both the cases was saccharine and, so the licence obtained for `saccharine 330 could be utilized for `saccharine 550 also, and there was no violation of the rule which required obtaining of excise licence, before entering into a manufacturing activity. It is nowhere indicated that in that case concept of `manufacture was in focus, from the point of view of levy to excise duty. 18. We have thus no hesita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that this concept is not known to or recognised by the Indian Excise Tariff system but even otherwise even where proforma credit for the duty paid raw material can be allowed that is not available for the items covered by Tariff Item 68, because the procedure of Rule 56A is not attracted to the goods covered by Tariff Item 68. So, as a result, even if proper procedure of Rule 56A had been observed, which does not seem to be the case as there is no plea to that effect, because of the fact that the goods having been held to be liable to excise duty under Tariff Item 68, that benefit is not available. 21. We are also unable to see as to in what context the authorities of the Hon ble High Court of Delhi in J.K. Synthetic s case could be pressed into aid by the appellants in this case, because there is no finding in that case having bearing on the questions involved in this appeal. 22. We also do not find any merit in the contention that the procedure of Rule 173B was not observed because it was for the appellants to contest the decision at that stage when they were asked to file a revised Classification List. The Assistant Collector is right in observing that since they did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical approach of having not raised the question of quashing the assessment order will not stand in the way of granting refund. Somewhat similar observations were made by Hon ble Madras High Court in the case of Madras Fertilisers Ltd. v. Assistant Collector of Central Excise - 1981 E.L.T. 194 (Mad.), wherein it was held that Government is not entitled to retain the excess duty recovered or collected as there is a legal obligation on its part to return the same because there is a corresponding legal right in the assessee to recover the same. Even otherwise the provisions of Section 11B of the Central Excises and Salt Act confers a substantive right upon the assessee to get refund of excess payment of duty subject to the only condition that the refund claim is lodged within six months or otherwise the duty is paid under protest. Except subject to this condition, the right of refund under Section 11B is an unfettered right without being subjected to any other condition, such as, finalisation of assessment or payment of duty in accordance with the approved classification/price list. In fact, the provisions of Section 11B, being of parent statute, will have overriding effect on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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