Bimal Chandra Basak, J. - (1.) This appeal by the Assistant Collector of Central Excise and Union of India is directed against a judgment and order dated 3rd December, 1984 passed by a learned Single Judge in an application under Article 226 of the Constitution of India. FACTS
(2.) The facts of this case lie in a short compass. The writ petitioner at all relevant time carried on the business of the manufacture, inter alia, of cotton and blended yarns at factories at Madurai and Serampore. Apart from the manufacture of yarn, the writ petitioner was required by some of its customers, such as Duniop India Ltd., to arrange nylon and rayon yarn supplied by the petitioner. It is stated that such arrangement of rayon or nylon cords was called a Tyrecord Warpsheet. It was the contention of the .petitioner that no manufacturing process is involved in making warpsheets and no new commodity known to commerce or industry came into being when yarn was arranged or assembled to form a warpsheet. Further, according to the petitioner, nylon and rayon yarn are liable to a duty of Central Excise under the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act). According to the petitioner, warpsheets being yarn and not any other commodity were not further excisable. Despite the aforesaid contention the excise authorities in West Bengal demanded Excise duty on such warpsheet on the ground that a nylon or rayon tyrecord warpsheet was a separate item of manufacture and liable to Central Excise under Item No. 68 of the First Schedule to the said Act. There is no dispute that for this period the petitioner paid ad valorem duty amounting to Rs. 1,05,114.94. Between 10th March, 1975 and 28th June, 1976 the petitioner paid duty amounting to Rs. 52,132.67 P. Further, the admitted position is that all the duty paid as aforesaid was paid under protest. Under these circumstances, on the 31st May, 1976 the petitioner moved this Court under the provisions of Article 226 of the Constitution of India against the same. A rule was issued and it was numbered C.R. No. 7883 (W) of 1976 wherein under the interim order made, the petitioner deposited the amount of duty claimed by the excise authorities in an account with the State Bank of India. The said Rule was made absolute by G.N. Roy; J. by an order dated 1st September, 1978. [1980 ELT 582 (Cal.)] It was held that no duty of excise was to be levied on tyrecord warpsheets. The appellant preferred an appeal before a Division Bench of this Court against the said judgment (Appeal No. A.O. No. 275 of 1979). This was ultimately dismissed by a judgment and order dated 28th February, 1980. The Special leave petition under Article 136 of the Constitution of India preferred by the Excise authorities was dismissed by a judgment and order dated 11th April, 1983. The petitioners applied for refund of the said duty being a total sum of Rs. 1,57,251.96 P. which was refused by the Excise authorities. On such refusal being made, this writ petition was filed for directing refund to the petitioner of the said sum of Rs. 1,57,251.95 P. forthwith with interest on the said sum at the appropriate bank rate with effect from 1st September, 1979. In the said writ petition an affidavit-in-opposition was affirmed. It is not necessary to refer to the same in details. It was inter alia contended that the petitioner already realised the said amount from its customers and should not be permitted to enrich itself unjustly at the cost of the public exchequer. In reply to the same, the petitioner took the stand that the petitioner will in the cases where the refundable Excise duty had been paid by the petitioner's customers, return the same to such customers. It was stated that such customers are few in number and the petitioner had complete records of Excise duty paid by such customers.
(3.) By a judgment and order dated 3rd December, 1984 the said writ petition was allowed and the respondent No. 3 was directed to refund the said sum of Rs. 1,57,251.95 P. and the matter was disposed of accordingly. Being aggrieved by the same, Union of India and the Assistant Collector of Central Excise have preferred this appeal. ARGUMENTS :- On behalf of the Appellants :;