COLLECTOR OF CENTRAL EXCISE BOMBAY BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED Vs. KOHINOOR MILLS BOMBAY:COLLECTOR OF CENTRAL EXCISE BOMBAY

JUDGEMENT

(1.) THESE appeals involve a common question for our consideration. It is to the effect 'when yarn was manufacturd in the weaving department of a composite textile mill and was captively consumed in the spinning department for manufacturing fabrics therefrom, whether any excise duty was payable on the manufactured yarn prior to 15-7-1977 when an earlier notification dated 18-6-1977 exempting such yarn from payment of excise duty was in operation, only because the ultimate fabrics got manufactured from such yarn on and from 15-7-1977 when the earlier notification stood rescinded'.

(2.) CIVIL Appeals 103 and 104 of 1988 are moved by the Collector of Central Excise of Bombay being aggrieved by the order passed by the Customs and Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal") which has taken the view that such yarn would not be liable to pay any duty while Civil Appeal No.5408 of 1998 of 1990 is moved by the assessee against the order of the Tribunal which has taken a contrary view. In order to appreciate the contours of this controversy, it is necessary to note a few relevant facts.

(3.) WE have heard learned counsel for the parties in support of their respective cases. In our view the contention canvassed on behalf of the revenue cannot be accepted. The reasons are obvious. It has to be kept in view that charge under the Central Excise Act fastened on a manufactured item once manufacture takes place. But the liability to pay the duty thereon will have to be decided in the light of the appropriate tariff applicable at the time when such manufactured commodity is cleared by the manufacturer as per the provisions of the Excise Rules. In this connection, Rule 9(1) of the Central Excise Rules, 1944 becomes relevant. It reads as under :-