1. By the present bunch of three applications perporting to be under Section 35-G of the Central Excises and Salt Act, 1944 (hereinafter called Act), the appellants applicants (hereinafter applicants) requests that in respect of order Nos. 553, 554 and 55/1983, dated 22-6-1983, a statement of case be drawn up and questions of law set out in para-8 of the application referred to High Court.
2. The applications were fixed for hearing today i.e., 27-12-1983, but none appeared for the applicants. A telegram was received from them requesting for adjournment or alternatively to consider and decide the applications on the merits of their submission.
3. On behalf of the respondent-non-applicants, Sh. V. Lakshmi Kumaran, Senior Departmental Representative raised an objection that the orders related among other things to the determination of a question having relation to the rate of excise duty and therefore the reference applications under Section 35-G of the Act are not maintainable.
4. In these Reference applications, the applicants M/s. India Jute Co.
Ltd., have substantially reiterated their arguments which they had advanced in the Revision applications which were disposed of by this Bench as appeals. They had inter alia argued that the main dispute pertains to 'Classification of blended yarn' containing cotton less than 90% which was classified by the Department under Tariff item 18E of the Central Excise Tariff and was cleared by the applicants after sizing during the period 17-3-1972 to 31-10-1976 on payment of duty on the weight of presized stage. Subsequently, the Department held that duty was leviable on the weight after sizing but at the rate applicable to the counts on the basis of weight before sizing. The demand for differential duty of Rs. 3,97,194.30 was raised and confirmed by the Department. The applicants resisted the demand for differential duty on the ground that duty shall be leviable on the weight after sizing at the rates applicable to the counts of yarn calculated on the basis of the said yarn after sizing and claimed refund of duty paid by them.
In the reference applications, the applicants have referred to Judgment of the Bombay High Court in the case M/s. Srinivas Cotton Mills Ltd.- 1983 Writ No. 2385 of 1979 decided on 7-9-1981 reported in 1981 E.L.T.867 (Bom.)=E.C.R. 133-D (Bombay); wherein, it was decided that sizing is not a part of manufacturing process, since manufacture of yarn is complete, at the Spindle stage or the Spindle point, when it merges from the Ring frame. The applicants have, therefore, argued that duty in the present cases should have been charged on the basis of the count and weight of unsized yarn since they had neither declared the sized counts in the Central Excise documents nor lodged any refund claim at any time on the ground that the rate of duty was relatable to counts of sized yarn.
The Counts of yarn vary before sizing and after sizing. From Notification No. 60/72-C.E., dated 17-3-1972 and No. 168/72-C.E., dated 24-4-1972, it would be seen that there is difference in the rate of excise duty depending upon counts of yarn. The applicants claim that duty should have been charged on the basis of counts of unsized yarn would undoubtedly be a question relating to rate of duty of excise.
Section 35-G of the Act providing for statement of case to High Court is excluded in its application inter alia to order relating to the determination of any question having a relation to the rate of excise duty. The words "having a relation to the rate of excise duty" are of wide import. In Income-tax Commissioner v. India Navigation Co. Ltd., AIR 1961 S.C. 1633, the Supreme Court inter alia held that when a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore. one arising out of its order. Following the ratio of this ruling when a question relating to determination of rate of duty was raised by the applicants in their grounds of appeal even though the Tribunal failed to deal with it and disposed of the appeal on a preliminary ground, the question relating to rate of duty of excise must be deemed to have been dealt with by the Tribunal in its order.
Such an order still remains an order having relation to the determination of any question having relation to the rate of excise duty.
5. The applicants themselves in their grounds of appeal had urged that the appeal involved the question of classification and relating to rate of duty. In view of this and foregoing discussion, Sh. V.Lakshmikumaran's objection that Section 35-G (1) of the Act relating to statement of case to High Court not being applicable in these applications is well founded. We find that the orders in question relate to question having relation to the rate of duty of excise and Section 35-G(l) of the Act is not applicable. The reference applications are accordingly rejected.