TMI Blog1987 (5) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... hree supplementary appeals since there were four causes of action. 2. The appeals involve common issues of classification and are, therefore, disposed of by this common order. The distinctive features of the individual appeals will be dealt with at the appropriate stage(s). 3. The facts of the cases are that the appellants are engaged in the manufacture of different varieties of yarn by spinning of different fibres as well as by doubling/twisting of duty-paid spun yarn with rayon filament yarn. In the present matters, the dispute is about yarns obtained by doubling/twisting of duty-paid spun yarn with duty-paid rayon filament yarn. These yarns are marketed under different names. 4. The aforesaid yarns were being classified under Item No. 18-E of the First Schedule ( CET , for short) to the Act, prior to 18-6-1977, when, consequent upon the 1977 Budget changes, the department classified them under Item No. 68 CET. The appellants contested this classification. 5. The dispute is whether the subject yarns were classifiable under Item 68 CET as the department had done or they were non-excisable, as the appellants contend, since, according to them, mere twisting or doubling of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector that considering the fact that the show cause notices which had been adjudicated upon in violation of the principles of natural justice, had the same subject as contained in other show cause notices, no useful purpose would be served by directing the Assistant Collector to re-decide the notices as it would mean merely postponing the evil day. 10. The orders passed by the Assistant Collector in the matters discussed above were ab initio void and this irregularity cannot be cured at a later stage, especially when the appellants had made a grievance of it before the Appellate Authority. The same grievance has been repeated before us also. We cannot but, therefore, set aside the orders of the lower authorities in so far as the specific matters referred to in para 4(e) of the Collector s orders are concerned. 11. The Assistant Collector s order No. CL/18/III/T.II/Kiran/79, dated 27-9-1980 confirms 23 demands. This Assistant Collector is not the one who passed the order, dated 21-1-1980 on the basic issue of classification. The Assistant Collector refers to his predecessor s orders on classification and says that he has no locus standi to pass a fresh order on classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were bad in law and should be struck down on that score. In support of his contention, a few authorities were also cited but we do not think it is necessary to refer to them and discuss them here since in all the cited cases either the show cause notices had been challenged at the initial stage or the adjudication orders/appellate/revisionary orders had been challenged before High Courts, while High Courts in their writ jurisdiction may have the power to quash show cause notices and the subsequent related orders, this Tribunal s powers are in relation to the orders impugned before it to confirm, modify or annul the orders or remand the matter to the lower authority for a fresh adjudication or decision. If, therefore, the impugned orders are based on, and rely on, trade notices/tariff advices, and not on the independent reasoning of the authority who passed the orders, those orders may be liable to be set aside on that score. But, is that the case here? As the learned departmental representative points out, though the show cause notices may have relied on trade notices/tariff advices, the Assistant Collector had not based his orders on them but had recorded his own reasons in suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the 1977 Finance Act. The issue inter alia was whether a new product came into existence by blending or twisting together of nylon yarn and cotton yarn. The process was this: one strand of cotton yarn was fed into one strand of nylon yarn to a double winder machine to form a cheese which was subsequently fed to a doubling machine where a few turns were given to the parallel yarns (cotton and nylon) and wound on a wooden pirn. It is useful to note also the further operations. The pirn, in turn, was fed to the loom as weft yarn. The entire process was an uninterrupted one starting with the double winder machine and ending with the emergence of cloth. The blended yarn was fully consumed by the petitioners in their own mills for production of fabrics - such yarn was not available in the open market. In the circumstances, the court Rule d that in the production of the blended yarn, no new commodity had emerged. 19. In the present case, there are some distinguishing features. The entire yarn tariff underwent restructuring in the Finance Act, 1977. Secondly, the appellants are admittedly a spinning mill. Evidently, therefore the subject yarn had to be cleared out of the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be gone into by the departmental authorities). 22. Yet another decision to which reference was made by the Councel for the appellants is that of the Madras High Court in Madura Coats v. Supdt. of Central Excise Ors., 1981 E.C.R. 415.D = 1982 E.L.T. 370 (Mad.). It is seen from the judgment that it was rendered in the context of Central Excise Notification No. 119/75, dated 30-4-1985 which provided for partial duty exemption to job works done on materials supplied to the job worker and returned after the job-work on receipt of job charges. The petitioner used to receive from M/s. Fenner, nylon filament yarn nylon yarn and cotton yarn which were twisted together at the petitioner s factory. The petitioner s claim was that they were not producing any new article but only processing the raw materials supplied to them and were so entitled to the benefit of the notification. The court held that the converted product produced before the court showed all the three articles supplied by Fenner, perceivable even to the naked eye and since no new material had been added by the petitioner, no new product falling under Item 68 CET had emerged. In the cases before us, Notification No. 119 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cotton yarn nor nylon yarn but a mixed yarn consisting of both and that the process of doubling or twisting which resulted in the new product (multifold yarn) was a process of manufacture . 25. The Tribunal s decision in India Jute Co. Ltd. v. Collector of Central Excise, Calcutta, 1986(8) E.T.R. 703 = 1986(25) E.L.T. 362, referred to in the course of the hearing before us, is, in our view, not relevant since the doubled yarn therein was made out of constituent yarns falling under the same Tariff item, which is not the case here. 26. It has been urged for the appellants that the scheme of the changes in the yarn tariff brought about by the 1977 Finance Act was not to throw out any particular type of yarn into the residuary Item No. 68 CET. We cannot accept this contention. Before the 1977 Budget, there was an express Item (18E) specifically providing for yarn, all sorts, not elsewhere specified in the tariff. The other items relating to cotton yarn, woollen yarn, etc. were re-worded in 1977 Budget defining the scope of the respective items with reference to different tests laid down in the items themselves. However, whereas Item 18E was deleted and reworded, a residuary item t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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