BINNY LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) M/s. Binny Limited, a public company incorporated under the Companies Act, which is the petitioner, is engaged in the manufacture of textile goods in one of its composite textile mills called "Bangalore Woollen Cotton and Silk Mills" situated at Bangalore City. Prior to 24th July, 1972 the petitioner had manufactured 17,381-30 kgs. of blended yearn ("yarn") with 50% terene, (and) consumed the same in the manufacture of a fabric called "Cascade".

(2.) "Blended yarn" and "fabrics" were dutiable to excise duty under tariff items Nos. 18-E, and 19(1)(2)(sic) respectively of the Central Excises and Salt Act of 1944 (Central Act 1 of 1944) ("the Act"). But, under rule 96V and W of the Central Excise Rules of 1944 ("the Rules) and Notification No. 62/72 CE dated 17th March, 1972 issued thereto by Government, the collection of excise duty on blended yarn was postponed to the point the 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 caused 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 which was not retrospective and it was not liable to pay separate duty on 17,381-30 kgs. of blended yarn. On an examination of the show cause notice issued by the Superintendent, the reply filed by the petitioner and the records, the Assistant Collector by his order dated 11th June, 1973 (Exhibit-C) overruled the objections, confirmed the show cause notice and called upon the petitioner to pay a sum of Rs. 1,73,813.00 as duty under the Act.