1. The impugned order-in-appeal was a combined order passed in relation to five orders in original passed by the Assistant Collector. Out of these, the appellant's appeal in relation to order-in original No.V(18-E)3-14/DA/73/304 dated 3-12-1974, involving differential duty of Rs. 1,12,893.36 was heard and allowed on 27-7-83 by this Bench. The remaining four appeals arising out of the same order-in-appeal but in relation to four different orders-in-original mentioned above were heard today. As they relate to the same appellants and involve a common point of law, they are being disposed of by this combined order.
2. The appellants stated that the facts in relation to appeals No.200/76-D and 202/76-D were that they had paid the duty leviable on the specified blended yarn falling under Item No. 18E of the Central Excise Tariff according to the rates prescribed in Exemption Notification No.63/72-C.E., dated 17-3-72 as and when the said yarn was removed from the spinning department to the weaving department. Their factory was working under the special procedure laid down in Rule 96V of the Central Excise Rules, 1944 till 23-7-72. On the mid-night of 23/24-7-72 they had in stock a certain quantity of rags and fents of cotton fabrics falling under Item 19-1(2) in which the said duty paid blended yarn had been used. With effect from 24-7-72, a new Notification No.168/72-C.E. came into force which fixed higher rates of duty for the said variety of blended yarn. The Department demanded differential duty under this notification in respect of the yarn contained in the said rags and fents lying in stock.
3. The appellants added that the facts in relation to Appeals No.201/76-D and 203/76-D were that they were paying duty on the specified blended yarn in accordance with Exemption Notification No. 64/72-C.E., dated 17-3-72 on removal of the said yarn from the spinning department to the weaving department. Here, the department demanded differential duty at higher rates in accordance with notification No. 168/72-CE, dated 24-7-72 in respect of the yarn contained in cotton fabrics falling under Item No. 19-1(1) lying in stock with the appellants on the mid-night of 23/24-7-72.
4. The appellants argued in relation to all the four appeals that the Department was not justified in giving retrospective effect to notification No. 168/72-C.E., dated 24-7-72. Their only prayer was that they should not be called upon to pay anything more than the duty already paid by them at the rate in force on the date of removal of the yarn for captive consumption. They stated that this Tribunal had already conceded this point in their appeal No. 97/76-D allowed on 27-7-83. Though the said appeal related to the yarn removed under the compounded levy scheme under Rule 96W while the present four appeals related to Rule 8(1) Exemptions, the principle involved was the same.
5. The Department's representative had nothing to say in respect of any of these four appeals.
6. We have carefully considered the matter. The yarn in this case was authorisedly removed for captive consumption in weaving of fabrics.
According to Rule 9A, the rate of duty in force as on the date of such removal has to be applied. Duty at such rate having already been paid, there was no further liability on the appellants. The appellants are right in saying that Notification No. 168/72-C.E., dated 24-7-72 was not retrospective in operation, and the rates prescribed in this notification could not be applied to the yarn which had been authorisedly removed before 24-7-72. In these cases, the yarn had not only been removed but also consumed in weaving of fabrics prior to 24-7-72. In relation to these four appeals, the relevant date under Rule 9A was the date of removal of the yarn and not that of resultant fabrics. Accordingly, we uphold the appellant's plea that their liability was limited to the duty payable in accordance with the rates prescribed in notifications No. 63/72-C.E., and No. 64/72-C.E., and allow these four appeals with consequential relief to them.