1990 (11) TMI 267

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....Rajesh Dhingra and reserved the order. 2. The facts, in short, are that under Notification No. 132/77-C.E., dated 18-6-1977, yarn used by composite textile mills in the manufacture of cotton fabrics was exempted from the payment of Central Excise Duty. This notification was withdrawn from the mid-night of 14th/15th July, 1977. During the period from 18-6-1977 to the midnight of 14/15-7-1977 the respondents manufactured cotton fabrics using cotton yarn manufactured in the same composite mill. The fabrics lying in stock on 14/15-7-1977 were cleared later on and the Department charged Central Excise Duty on the cotton yarn contained in the fabrics. The respondents filed a refund claim for the duty on yarn on the ground that the duty on yarn w....

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....challenged the order of the Collector (Appeals) by filing the present appeal before this Tribunal. 3. In the case of M/s. Aryodaya Spinning & Weaving Co. Ltd. (supra), the Honourable Gujarat High Court held that since Clause (b) of the 2nd proviso to Notification No. 226/77-C.E. sought to give retrospective effect to imposition of duty on cellulosic spun yarn and cotton yarn which were fully exempted from payment of duty under Notification No. 132/77, dated 18-6-1977, therefore, it was ultra vires of the rule making powers of the Central Government under Rule 8 of the Central Excise Rules, 1944 in so far as it related to the period prior to 15-7-1977. It was also held by the Hon'ble High Court that in the case of yarn, duty was leviable at....