TaxTMI 
TaxTMI 
1985 (9) TMI 165
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.... (ii) texturised yarn out of base-yarn; and (iii) other texturised yarn; and provided different rates of duty. The duty payable on texturised yarn was: "The duty for the time being leviable on the base yarn, if not already paid, plus Rs. 20/- per kg." (emphasis supplied). 3.  Notification No. 125/75 had only the effect of reducing the additional rate of Rs. 20/- per kg to that of Rs. 10/-; description of the yarn, or the framework of duty-computation, remaining the same. 4.  During the period 24-5-1976 to 28-2-1977, for which period differential duty, amounting to Rs. 64,680/- has now been claimed by the Department, yarn was cleared by the appellants on payment of Rs. 10/- per kg. as duty. Appellants plead that they operated under Central Excise licence, as job workers, and that clearances were effected on proper assessment and that all the statutory records, such as RG1, PLA and raw-material account, were maintained. However, a demand, by means of show cause notice dated 15-4-1977, was raised by the Superintendent of Central Excise, Range-1, Ludhiana, on the view that since the petitioners had not proved that duty on the base yarn, at the then effective ra....
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....and, as such, there is a presumption of discharge of duty liability at the stage of clearance of base yarn and that the lower authorities have erred in passing on the burden to the appellants to establish the duty-paid character of the base yarn. They rely on judgments of various high courts in this regard, particularly in the cases of 'Sulekh Ram and Sons' v. Union of India and Others '1978 E.L.T. (J 525)', decided by the Delhi High Court; 'Champala and Company' v. Collector of Central Excise, Bangalore-1 '1978 E.L.T. (J 492)'; M/s Electric Lamp (India) Pvt. Ltd. v. Collector of Central Excise, Calcutta and Orissa and Others '1978 E.L.T. (J 84)'; and M/s Empire Dyeing and Manufacturing Co. Ltd. v. V.P. Bhide and Others '1977 E.L.T. (J 34)'. 8.  They further plead that, even though they had furnished enough evidence and material to show that duty had, in fact, been paid, or ought to be presumed to have been paid, but the authorities, instead of conducting verification, have assumed against the appellants which presumption was erroneous. They reiterated that the base yarn purchased from open market had to the treated as duty-paid in the absence of proof to the contrary burde....
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....differently worded and its ratio could not be wholly applied to the present case. According to him, the case, which had more bearing on the present appeal, is the one decided by the Supreme Court in the case of M/s J.K. Steel Ltd. v. Union of India and Others 'A.I.R. 1970 S.C. (1173)', where their Lordships gave interpretation on the expression : 'duty for the time being leviable', and contended that this duty had to be as prevailing at the time of second clearance ; namely, that of texturised yarn in the present case. 13.  He further argued that 'Sulekh Ram and Sons' case did not take note of the system of exemptions in the Excise Law and, in view of the fact that there could be cases, as noted in the 'J.K. Steel' case, where duty at the first stage was not paid due to some exemption enjoyed by the manufacturer, then the assumption of such duty having been paid could not arise. Shri Sachar contended that wording of the notification in the present case was more similar to another case decided by the Supreme Court, reported as 'Ahura Chemical Products Pvt. Ltd.v. Union of India '1981 E.L.T. 613 (S.C.)' and that, in view of the fact that appellants were claiming concessional ....
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....e open market' would entitle the party to the benefit of the exemption notification in that case. 16.  It is noteworthy that their Lordships of the Supreme Court held that, in spite of the fact that it was positively proved in that case that duty had not been paid on the raw material by the manufacturer thereof by virtue of having availed of exemption from duty, but even then, on account of simple fact that they had been purchased from 'open market', relief from payment of further duty was held to be available to the party concerned. 17.  The notification in the case before us is couched, on the other hand, in negative terms. We may further add that, in fact, it is the wording of the Tariff entry which is so framed and the notification has the effect of only reducing the additional duty of texturisation from Rs. 20/- per kg to Rs. 10/-per kg. The justification for including the rate of duty payable on the base yarn at the end of the processor, engaged in texturisation or dyeing of the yarn, would arise only if the Department is able to show that 'duty had not been paid' by the spinner or manufacturer of base yarn. We agree with Shri Sachar that the wording of indivi....