9911796707
TMI Blog1987 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... twinkle nylong yarn. The respondents pay excise duty on the cotton yarn as well as the on fabric which is the end-product. The twinkle nylon yarn is purchased by the respondents from the open market, excise duty having been paid thereon. 3. In classification lists dated 14th August, 1973 and 17th January, 1975 submitted by the respondents to the Excise authorities, the process by which they made the weft yarn was stated. They applied on 28th September, 1971 for permission to avail of the special procedure set out under Rules 96A, 96L and 96V of the Central Excise Rules and permission was granted. 4. On 17th March, 1972 Tariff Item 18E was introduced in the First Schedule to the Central Excise Act. It levied duty on "yarns of all sorts not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to explain why duty in the said amounts should not be recovered, the fabrics relevant thereto not be confiscated and penalty not be imposed. 6. The respondents filed the writ petition impugning the show cause notice on 29th March, 1976. At the interim stage the Excise authorities were directed to adjudicate upon the show cause notice. At the hearing given thereon to the respondents, the Excise authorities informed the respondents that they would rely only upon the material that was set out in the show cause notice. For the hearing the respondents filed eight affidavits averring that the weft yarn was not a new product and they informed the Excise authorities that the deponents of the affidavits were available for cross-examination. 7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cotton yarn and was, therefore, covered by Tariff Item 18E which dealt with yarn not elsewhere specified. The order rejected the respondents' contention that, as the weft yarn was wholly consumed in the respondents' mill in the production of the end-product, the fabrics, no excise duty was leviable thereon. It also rejected the respondents' contention that Rule 9(2) of the Central Excise Rules was not attracted because there had been no clandestine removal. 10. In the impugned judgment, the learned Judge noted the contentions raised on behalf of the respondents but based his conclusion only upon the first of these. He observed, very properly, that the main question which fell for determination was whether the weft yarn was a product which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weft yarn was closely twisted and the nylon yarn constituted in the twist had become an integral part thereof so that any attempt to separate one from the other was rendered difficult and could not be done without damaging the weft yarn. This was contrary to the affidavits which had been filed. The learned Judge, referring to the affidavits, also found that the weft yarn was not a product known to the trade nor was it available in the market. It could not, therefore, be considered a distinct or separate product and the conclusion of the adjudicating officer that a new product had emerged was not correct. For these reasons, the petition was made absolute. 11. The affidavits filed on behalf of the respondents before the adjudicating officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were not cross-examined. There was not an iota of evidence placed on the record before the adjudicating officer by the Excise authorities that in any manner countered the evidence led by the respondents. There was, therefore, no option open to the learned Single Judge but to accept the evidence led by the respondents and strike down the order of adjudication impugned in the petition. For the same reasons, we must uphold the judgment of the learned Single Judge. It is clear from the evidence, to which we have referred that by the inter-twinning of the cotton and nylon yarn, with twists of only four to five per inch, no essential difference in identity had been brought about. No yarn had been consumed in the making of the weft yarn. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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