K.S.PARIPOORNAN - (1.) SPECIAL leave granted in S.L. P. (C) No. 11008 of 1988.
(2.) THE above three appeals involve a common question of law, namely, whether "Nylon Twine" can be considered as "Nylon Yarn" so as to be covered by Item 18 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act") as it stood prior to the Amendment of 1977. "18. RAYON AND SYNTHETIC FIBRES AND YARN JUDGEMENT_413_10_1996Html1.htm We heard counsel. In this group, the main appeal is Civil Appeal No. 715/81. It is an appeal preferred by the Union of India (Revenue) against the judgment and order of the High Curt of Bombay dated 9-4-1980, rendered in Special Civil Application No. 2974/78. In the other two cases, the judgment in Special Civil Application No. 2974/78, was followed. The judgment in the said special civil application is reported in 1980 ELT 249 (Bom).
(3.) THE respondent-assessees manufacture "Nylon Yarn" and "Nylon Twine". THEy are doing so ever since 1962. Under first schedule, Item 18 of the Act excise duty is payable in respect of "Nylon Yarn" as specified therein. THE notification issued under Rule 8 of the Excise Rules provided that "Nylon Yarn", which is meant for use in the manufacture of fishing net and parachute cords is exempt from the payment of so much of excise duty leviable under Item 18 as is in excess of Rupees 4/- per kg. THE assessees contended that "Nylon Twine" manufactured by them is used for the purpose of making fishing nets. Prior to 1975 they were allowed to clear Nylon twine manufactured by them on payment of excise duty as specified under the above exemption notification. THEreafter, when the new item, viz, Item 68 (residuary entry) was introduced in the Act, it was contended by the Excise Authority that Nylon twine manufactured by the assessees was not covered by item 18. According to the Revenue Nylon twine and Nylon Yarn are two different items and Item 18 takes within its fold Nylon yarn only and not Nylon twine. THE authorities claimed excise duty on "Nylon twine" under Item 68. THE assessees paid such duty under protest. THEreafter, the application filed by the assessees for refund before the Assistant Collector failed. He passed an order to that effect on 28-5-1976. THE appeal filed was rejected by Appellate Collector on 28-9-1976. Similarly the Central Government rejected the revision by order dated 31-10-1979. It is thereafter the assessees approached the High Court of Bombay for refund of the amount paid under protest. A Division Bench of the High Court heard and disposed of the petition by judgment and order dated 9-4-1980. Sujata Manohar, J. delivered the leading judgment and Masodkar, J., though for different reasoning, agreed with the conclusion of Sujata Manohar J. Sujata Manohar, J., after referring to the following materials - viz. - Encyclopedia Britannica, Vol. X (abridged version), the Indian Standards Institution Standard bearing No. AIS 332 of 1967, wherein the expressions "Twine and Yarn" were dealt with, the Indian Standards Institution Standard bearing No. IS 1402-767 relating to "netting for fishing", the Manual called "Netting Materials for Fishing Gear" the manual published by the Food and Agriculture Organisation of the United Nations, the orders received by the assessees from the Director of Fisheries, Madras, two affidavits, one from the Managing Director of Maharashtra Rajya Machimar Sekhari Sangh Limited and another from a Partner of Maharashtra Fishing Material Company, concluded thus, in paragraph 14 of the judgment: "18 RAYON AND SYNTHETIC FIBERS AND YARNTariff ItemDescription of goods Rate of duty Basic 18RAYON AND SYNTHETIC FIBRES AND YARN INCLUDING TEXTURED YARN, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER:- (I) Fibres and Yarn other than Textured Yarn. Rs. 85.00 per Kg. (ii) Textured Yarn produced out of Base Yarn.The duty for thetime being leviable on the base yarn, if not already paid plus Rs. 20.00 per Kg. (iii) Other Textured Yarn.Rs. 105.00 per kg. Explanation-I " Fibres and Yarn, other than Textured yarn" shall be deemed to include -- (i) man-made fibres; (ii) man-made metallic yarn; (iii) spun (discontinuous yarn containing not less than ninety percent. by weight of man-made fibres calculate on the total fibre content; and (iv) man-made filament (continuous) yarn that has not been processed to introduce crimps, coils, loops or curls along the length of the filaments, but does not include bulked yarn and stretch yarn. Explanation-II "Textured Yarn means yarn that has not been processed to introduce crimps, coils, loops or curls along the length of the filaments and shall include bulked yarn and stretch yarn. Explanation-III "Base Yarn" means yarn falling under sub-item (i) of this Item from which theTextured Yarn has been produced. Explanation-IV - This item does not include mineral fibres and yarn." ;