UNION OF INDIA Vs. SWAN MILLS LTD

JUDGEMENT

(1.) THE complaint of the writ petitioners was that in respect of classification lists submitted by them in respect of yarn after sizing which was sold by them. The excise authorities, who are the appellants before us, were approving the classification lists with the illegal and wrongful condition that the excise duty was to be levied again on the weight of the sizing material. No affidavit in reply was filed by the excise authorities. The learned single Judge noted that the contention raised in the petition was covered by a decision delivered on 4th September, 1981 in writ Petition No. 455 of 1979. He also noted that a Division Bench of the Gujarat High Court in special Leave Petition No. 2114 of 1976, decided on 30th July, 1981 had taken a similar view, and that the Special Leave Petition preferred by the excise authorities there against to the supreme Court had been summarily dismissed on 19th April, 1982. In view of these facts and the consistent view of this court in several writ petitions mentioned by the learned Judge, he passed an order allowing the writ petition and quashing the impugned order and show cause-cum-demand notice.

(2.) THE excise authorities are in appeal.

(3.) IT was contended by Mr. Ghandy, learned counsel for the respondents, that the appeal did not lie in view of the fact that the order that was passed by the learned single judge was virtually on a concession. We have, however, elected to hear the appeal on merits because a concession on a point of law cannot be treated as binding upon the appellants. Mr. Devadhar, learned Counsel for the appellants, drew our attention to the judgment of the Delhi High Court in J. K. Cotton spinning and Weaving Mills v. Union of India, 1983 (12) ELT 239. The Court said in paragraph 30 that the only other point which remained to be dealt with was with regard to sized yarn or unsized yarn being liable to levy of duty in factories where spinning and weaving was done in a composite mill having a continuous integrated process of manufacture. To the Division Bench of the Delhi High Court the position admitted of no doubt. They said, "the goods that come into existence after spinning is yarn which is unsized. Merely because the goods are sized the nature of the goods is not changed. Sizing is only a process in manufacturing fabrics and does not amount to manufacturing new goods. Sized yarn is not new goods which come into existence. We clarify, if unsized yarn is cleared from the factory or a place specified under Rule 9 or goes into the main stream of the market, then the unsized yarn would attract duty. Similarly, if sized yarn is cleared in the same way then sized yarn would attract duty. The question before us is whether sized or unsized yarn would be liable for duty in an integrated process of manufacture," what Mr. Devadhar stressed is the sentence "similarly, if sized yarn is cleared in the same way then sized yarn would attract duty. " Mr. Devadhar fairly drew our attention to the fact that this judgment of the Delhi High Court was taken in appeal to the Supreme Court and while upholding it no view was expressed by the Supreme Court that can have any bearing on the question that is now raised in the appeal.