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TMI Blog1984 (11) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn" and "fabrics" were dutiable to excise duty under tariff items Nos. 18-E, and 19(1)(2)(sic) respectively of the Central Excises and Salt Act of 1944 (Central Act 1 of 1944) ("the Act"). But, under rule 96V and W of the Central Excise Rules of 1944 ("the Rules) and Notification NO. 62/72 C.E., dated 17th March, 1972 issued thereto by Government, the collection of excise duty on blended yarn was postponed to the point of clearance of "fabric" made out of such yarn, which is called as "compounded levy". Admittedly Government in its Notification Nos. 168 and 169 of 1972, dated 24th July, 1972 ("notifications") modified the aforesaid scheme and later withdrew the aforesaid notification and abolished the compounded levy scheme on blended ya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order dated 20th May, 1974 (Exhibit-E) dismissed the same. Against the said orders of the Appellate Collector and the Assistant Collector, the petitioner filed a revision petition before Government, which by its order dated 29th July, 1976 (Exhibit-G) dismissed the same. In this petition under article 226 of the Constitution, the petitioner has challenged the order of Government, the Appellate Collector and the Assistant Collector. 5. As before the authorities, the petitioner has asserted that the blended yarn in dispute had been manufactured and consumed in the manufacture of fabric before 24th July, 1972. On this factual basis, the petitioner has urged that Notification No. 169 of 1972, dated 24th July, 1972 which was prospective a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wool or silk content being less than 40 per cent by weight of such yarn (where such yarn contains wool or silk) and falling under item No. 18-E of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and of the description specified in column (2) of the Table hereto annexed, shall be the rate specified in the corresponding entry in column (3) of the said Table. THE TABLE 1 S.No. 2 Description of yarn Rate 3 Paise per square metre of the (fabric made) 1. Yarn used in making superfine fabrics. 20.00 2. Yarn used in making fine fabrics. 12.00 3. Yarn used in making medium- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be the count of all yarn contained in such fabric." When this notification was in operation, availing the benefit of the special procedure and that notification, the petitioner had manufactured blended yarn in dispute and had consumed the same in the manufacture of a fabric called "Cascade". In the show cause notice, the orders and the return filed before this Court, the respondents have not rightly disputed this fact. But, they have strongly relied on Notification No. 169 of 1972 as enabling them to collect excise duty on the same. The said notification that is material reads thus : Notification No. 169/72, dated 24th July, 1972. In pursuance of rule 96W of the Central Excise Rules, 1944, the Central Government hereby directs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 169 of 1972 does not require to be examined as those notifications in terms have not been given retrospective effect. When that was so, the question of blended yarn being separately assessed as if the notification No. 169/72, dated 24th July, 1972, provided for the same is wholly misconceived and the demand made by the Revenue on that basis is clearly without the authority of law. 11. Explanations to rules 9 and 49 of the Rules declare movement of goods from one place to another within the factory for continuous process, as removal from the factory. On the very terms of these provisions, blended yarn of 17,381.30 kgs. manufactured and consumed by the petitioner prior to 24th July, 1972 was not separately dutiable to duty. Unfortunately a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in terms of Notification No. 62/72, dated 17th March, 1972. The exemption once earned was absolute full and final. On any principle, such goods cannot be subjected to duty under the Act. In this view also, the demand made by the Revenue was wholly misconceived and illegal. In Sirpur Paper Mills Limited v. Union of India and Others 1984 E.L.T. 217 (A.P.) a Division Bench of the High Court of Andhra Pradesh has taken a similar view. I am in respectful agreement with the views expressed by their Lordships in this case. 16. In Orient Paper Mills Limited's case AIR 1967 S.C. 1564 on which strong reliance was placed by Sri Bhat, the Supreme Court did not examine the precise question and has not declared the law. Even otherwise, the ratio in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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