TaxTMI 
TaxTMI 
2010 (8) TMI 267
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....-89 dated 8-3-1989 respectively. It was observed that the Respondent received single S.S. Polyester Yarn of 60/1 from M/s. Centenary Mill of Madurai for making S.S. Polyester thread of 60/2. The Polyester thread is exempted from duty vide Notification No. 53/87 dated 1-3-1987 and these goods alone are exported. After issuing show cause notice dated 6-9-1989 and after personal hearing, the 1st Appellant-Maritime Collector by order in C. No. V/55/18/1/89 dated 28-12-1989 rejected claim of Respondent for rebate of Central Excise duty holding as under : ".... in this case the duty paid S.S. Polyester Yarn has been cleared under GP1 from one factory to another factory and the same has been converted to S.S. Polyester thread and exported under AR4A. The quantity cleared for export from M/s. Madura coats, Ambasamudram is 6500 Kgs., which involves processing. In fact the Yarn of 60/1 has been converted to S.S.Polyester thread of 60/2 which is exempted from payment of duty. Hence, as far as Rule 12 and the Notifications issued there under are concerned, the duty on the goods exported only is eligible for rebate and not on the contents of the goods exported. Secondly, the duty paid goo....
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....ntral Excise duty for the thread. The learned single Judge further held that the excise duty was paid on yarn by the sister concern and Respondent Mill having exported the thread and thread has not lost its identity and therefore the Department cannot claim the yarn twisted into thread did not suffer the excise duty so as to deny the rebate lawfully claimed by the Respondent. The learned single Judge further held that only duty suffered yarn has been twisted into thread and the character of the yarn, which has suffered the excise duty, is in no manner different from yarn and on those findings the learned single Judge allowed the Writ Petition quashing the orders of the 1st Appellant dated 28-12-1989 and the 2nd Appellant dated 11-7-1991 and directed the Appellants to refund the excise duty of Rs. 6,91,585.59 and Rs. 49,330.51 paid by the Respondent. 8. challenging the order of learned single Judge, the Central Excise Department has come forward with this Appeal. Mr. T.R. Senthil Kumar, learned counsel for the Appellants mainly contended that as against the impugned order dated 28-12-1989, the Respondent has already exhausted the statutory remedy and when the revision appli....
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....ed on 3-1-1991, which was also challenged by way of revision before the Government of India. By the Order dated 24-6-1991, the revision also came to be dismissed. It is pertinent to note that in so far as four rebate claims made in AR4A No. 52/88-89, 44/88-89, 58/88-89 and 72/88-89, Respondent has not challenged the order of the Revisional authority dated 24-6-1991. Having exhausted the statutory remedy available under the Act, it is not open to the Respondent to challenge the order of the 1st Appellant in C.No. V/55/18/1/89, dated 28-12-1989 on the same grounds by invoking Article 226. 12.Insofar as the rebate claim for Rs. 49,330.51, being the subject matter of the order in C.No. V/55/18/89-E-C, dated 11-7-1991, as against the said order, under Section 35 of Central Excise Act, appeal lies to the Commissioner of Central Excise (Appeals), when there is a statutory remedy of Appeal, resort must be had to that statutory remedy. In the main Writ Petition, the Respondent has averred that the authorities concerned have already taken a view rejecting the rebate claim on the duty paid on the yarn, and therefore, no useful purpose would be served by preferring appeal before the same au....
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.... (See para 13 at page 408 of the report). It is obvious that a writ court should not encourage the aforesaid trend of by-passing a statutory provision." 15. Observing that in tax matters, judges must exercise self-discipline and that there shall be no short circuiting of statutory remedies, First Bench of this Court in M/s. Nivaram Pharma Private Limited rep. by its Director Sadarmal M. Chordia v. The Customs, Excise And Gold (Control) Appellate Tribunal, South Regional Bench, Madras, 2006 (205) E.L.T. 9 (Mad.) = (2005) 2 M.L.J. 246, has held as under : "... 5. It is well settled by a series of decisions of the Supreme Court that particularly in tax matters there should be no short circuiting of the statutory remedies, vide Titaghur Paper Mills Company Limited v. State of Orissa, A.I.R. 1983 S.C. 603, Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Limited, A.I.R. 1985 S.C. 330, etc. 6. It is well settled that when there is an alternative remedy ordinarily writ jurisdiction of this Court under Art. 226 of the constitution should not be invoked. This principle applies with greater force regarding tax proceedings. As observed by the Sup....
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....at this distant point of time, it is not desirable to direct the Respondent to avail alternative remedy before the Appellate Authority, since the learned single Judge has gone into the merits of the matter and ordered refund of the duty paid on the yarn, notwithstanding the availability of statutory remedy of appeal, we thought it fit to examine the merits of the case. 18.The period of exports effected from 26-8-1982 to 28-11-1989. Rule 12 of Central Excise Rules reads as under : "12. Rebate of duty on goods exported. - The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of duty paid on excisable goods, if exported outside India, to such extent, and subject to such safeguards, conditions and limitations as regards the class of goods, destination, mode of transport, and other allied matters as may be specified therein : Provided that if the Collector is satisfied that the goods have in fact been exported, he may, for reasons to be recorded in writing, allow the whole or any part of the claim for such rebate even if all or any of the conditions laid down in any notification issued under this rule have not been complied w....
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....03, 52.04, 54.04, 55.05 and 55.06 sewing thread means multiple (folded) or cabled yarn." (a) Put up on support (for example reels, tubes) of a weight (including support) not exceeding 1000 gms. (b) Dressed for use as a sewing thread (c) With a final 'Z' twist. As rightly contended by the learned counsel for the Appellants, the above statutory prescription shows that all the multiple folded or cabled yarn are not sewing thread and it is only such of those doubled/multiple (folded or cabled yarn) which are dressed for use as sewing thread and with a final 'z' twist and which are put up in support of a weight not exceeding 1000 gms alone is called sewing thread. 22. From the above, it is clear that the term "sewing thread" connotes a variety of yarn regardless of fibre, which is treated with solid or semi-solid or waxy materials to secure a smooth compact strand which is quite flexible but which presents no loose fibres. The very purpose of sub-clause (3) of Note 3 of Section XI of the First Schedule to the Central Excise Tariff Act 1985 stipulates the dressing of the yarn to make it fit for u....