UNION OF INDIA Vs. JAIN SPINNERS LIMITED

JUDGEMENT

(1.) Leave granted.

(2.) The respondents herein are the manufacturers of Cellulosic Spun Yarn containing man-made fibre of non-cellulosic origin, i.e., by blending cellulosic fibre and the waste of non-cellulosic origin in different proportions.;They filed two classification lists being List No. 4/83 dated 5-7-1983 and List No. 9/ 84 dated 1-3-1984 under Tariff Item No. 18 111 (i) showing in each of the two lists [i] 85% of cellulosic fibre and 15% waste of noncellulosic origin, [ii] 52% of cellulosic fibre and 48% waste of non-cellulosic origin and [iii] 60% of cellulosic fibre and 40% waste of non-cellulosic origin.

(3.) It appears that from June 1983, the respondent-Company started manufacturing yarn out of blending of NCSW/Viscose and claimed classification under Tariff Item No. 18 Ill (i) as per the classification list effective from 5-7-1983. The main varieties were 40s and 60s and the rate. of duty in July 1983 was Rs. 1. 30 plus 15% [Additional Duty] plus 10% [Special Duty], i.e., total of Rs. 1.63 approximately, per k.g. for 4 0 s yarn. For the same count of yarn for Polyster/Viscose manufactured out of virgin fibre, the rate of duty was Rs. 9.00 plus 15% [Additional Duty] plus 10% [Special Excise Duty], i.e., total oi Rs. 11.25 per k.g. The difference in Central excise duty on these two varieties was, therefore, Rs. 9.60 per k.g. for 40s yarn. In the same manner, the difference in duty for 60s yarn was Rs. 6.75 per k.g. The clearance of yarn manufactured out of NCSW/Viscose blend started from July 1983 onwards asthe classification list was filed w.e.f. 5-7-1983.