TaxTMI 
TaxTMI 
1984 (11) TMI 71
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....arn was postponed to the point of clearance of "fabric" made out of such yarn, which is called as "compounded levy". Admittedly Government in its Notification Nos. 168 and 169 of 1972, dated 24th July, 1972 ("notifications") modified the aforesaid scheme and later withdrew the aforesaid notification and abolished the compounded levy scheme on blended yarn. 3. On the sole basis of the Notification No. 169 of 1972, dated 24th July, 1972, the Superintendent of Central Excise, Concurrent Assessment and Inspection Group, Bangalore-5 ("the Superintendent") by his notice No. GI-6 (BM)/72, dated 2nd December, 1972 (Exhibit-A) called upon the petitioner to show cause as to why a sum of Rs. 1,73,813/- being the short levy or non-levy on blended yarn on 17,381.30 kgs. should not be collected from it. In response to the same, the petitioner showed cause on 14th December, 1972 before the Assistant Collector of Central Excise, Bangalore III Division, Bangalore-1 ("the Assistant Collector")- in which it inter alia urged that the entire quantity of yarn had been manufactured and consumed in the manufacture of fabrics before the promulgation of Notification No. 169 of 1972, dated 24th July, 1972....
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....on 17th March, 1972 extended the benefit of the special procedure contained in Chapter-E(IV) of the Rules on blended yarn manufactured in composite textile mills and that notification that is material reads thus : Notification No. 62/72, dated the 17th March, 1972. "In pursuance of rule 96W of the Central Excise Rules, 1944, the Central Government hereby directs that the rate of duty in respect of yarn containing partly more than 40 per cent by weight of cotton and partly any other fibre or fibres, the wool or silk content being less than 40 per cent by weight of such yarn (where such yarn contains wool or silk) and falling under item No. 18-E of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and of the description specified in column (2) of the Table hereto annexed, shall be the rate specified in the corresponding entry in column (3) of the said Table. THE TABLE 1 S.No. 2 Description of yarn Rate 3 Paise per square metre of the (fabric made) 1. Yarn used in making superfine fabrics. 20.00 ....
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....reby directs that for the words, figures and brackets "Yarn containing partly more than 40 per cent by weight of cotton and partly any other fibre or fibres, the wool or silk content being less than 40 per cent by weight of such yarn (where such yarn contains wool or silk)" occurring in the Notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 62/72-Central Excises, dated the 17th March, 1972, the words, brackets, letters and figures "yarn containing two or more of (a) synthetic staple fibre of cellulosic origin, (b) jute (including Bimlipatam jute or mesta fibre) and (c) cotton, wherein the jute (including Bimlipatam jute or mesta fibre) content, if any, being less than 50 per cent by weight of such yarn" shall be substituted." This Notification issued by Government on 24th July, 1972, is prospective and does not purport to withdraw the exemption, concession or privilege extended to the manufacturers on the manufactured article for the earlier period. The levy and collection of duty on the article manufactured earlier and consumed in the manufacture of fabrics, is not sought to be undone by Notification No. 169 of 1972, dat....
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....in general and rules 96V and W in particular and Notification No. 62/72, dated 17th March, 1972, it necessarily follows from the same, that those goods had earned exemption in terms of Notification No. 62/72, dated 17th March, 1972. The exemption once earned was absolute full and final. On any principle, such goods cannot be subjected to duty under the Act. In this view also, the demand made by the Revenue was wholly misconceived and illegal. In Sirpur Paper Mills Limited v. Union of India and Others 1984 E.L.T. 217 (A.P.) a Division Bench of the High Court of Andhra Pradesh has taken a similar view. I am in respectful agreement with the views expressed by their Lordships in this case. 16. In Orient Paper Mills Limited's case AIR 1967 S.C. 1564 on which strong reliance was placed by Sri Bhat, the Supreme Court did not examine the precise question and has not declared the law. Even otherwise, the ratio in this case doss not really bear on the point. 17. Sri Jagadeesan has lastly contended that the duty, if any, paid from 24th July, 1972 to 5th December, 1972 was adjustable towards duty payable if any, on blended yarn on the basis of Notification No. 169/72, dated 24th July, 19....