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TMI Blog1987 (12) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act to M/s. Orkay Silk Mills Pvt. Ltd., Bombay (hereinafter referred to as the respondents) proposing to set aside Order-in-Appeal No. V-2(18)3217/81, dated 22-12-1981 passed by the Appellate Collector of Central Excise, Bombay. Since the proceedings initiated with the said notice had remained unconcluded on the eve of the inception of this Tribunal, they were transferred to it in terms of Section 35P of the Act. 2. The facts of the case, briefly stated, are that the respondents are engaged in the activity of texturising polyester Nylon Filament Yarn, indigenous as well as imported. This work is undertaken by them both on their own account as well as on job basis. M/s. Deluxe India Exports, Bombay, sent to the respondents a consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 55/78 referred only to Central Excise duty and that since there was no question of levying excise duty on the imported base yarn, the question of its payment did not arise. On this reasoning, he held that, on texturisation of the imported yarn, the respondents were liable to pay duty at Rs. 5/- per kg. only. The fact that the imported base yarn had been exempted from additional duty of customs would not, in the Appellate Collector's view, make any difference whatsoever to this position. On examination of the case records, the Central Government formed a tentative view that the Appellate Collector's order was not proper, legal and correct. The basis for this view, as contained in para 5 of the show cause notice, is reproduced below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment of Revenue and Banking No. 130/77-Central Excises dated the 18th June, 1977, the Central Government hereby exempts textured yarn of the description specified in column (2) of the Table hereto annexed and falling under sub-item II(i)(b) of Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entry in column (3) of the said Table. S. No. Description Rate of duty 1 2 3 1. Textured yarn produced of base yarn. The duty for the time being leviable on the base yarn if not already paid plus five rupees per kilogram. 2. xxxxxx xxx xxx Explanation I. - "Base Yarn" means yarn falling und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory rate of duty as per the First Schedule and this levy had not been discharged by the base yarn, the resultant texturised yarn would not be eligible for the concessional rate of duty laid down in the notification. She also submitted that the word "leviable" could mean leviable with reference to Section 3 of the Central Excises and Salt Act or Section 3 of the Customs Tariff Act. In this case, additional duty of customs, though leviable, had not been paid. Therefore, the Central Excise Notification would not apply. 7. In reply to the aforesaid contentions, Shri Jagtiani, counsel for the respondents, submitted that the show cause notice issued by the Central Government merely called upon to pay additional duty of customs. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imported base yarn since Notification 55/78 did not lay down any such condition in contrast to certain other notifications such as 201 of 1979 and 97 of 1979. He also referred to Central Excise Rule 57A authorising proforma credit of excise duty as well as additional duty of customs paid on any goods. His last submission was that, in any event, the imported base yarn had paid additional duty of customs at the appropriate rate which, in view of customs exemption Notification 117/78, was nil. By seeking to recover additional duty, the Department was setting at naught the scheme of duty free imports under the Advance Licensing Scheme. 8. We have carefully considered the contentions of both sides. 9. The show cause notice dated 18th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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