TMI Blog1969 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... 1963 (Exh. P-12) for obvious reasons. The rule making authority had not been vested with the power under the Central Excise and Salt Act to make rules with retrospective effect. Therefore the retrospective effect purported to be given under Exh. P-12 was beyond the powers of the rule making authority. Appeal allowed - C.A. 2346 OF 1966 - - - Dated:- 15-10-1969 - J.C. SHAH AND K.S. HEGDE, JJ. For the Appellant : M. C. Chagla, Sardar Bahadur, Yougindra Khushalani and Vishnu B. Saharya For the Respondents : V. A. Seyid Muhammad, B. Dutta and S. P. Nayar JUDGMENT The only question for decision in this appeal by Special Leave is whether the coils of cotton yarn cleared out of the appellant's factory during the period from 17-8- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty w.e.f. July 24, 1962. In view of this notification, the appellant did not pay any excise duty on the yarn produced by it and cleared out of the factory in coils during the period from 17-8-1962 to 14-11-1962. The appellant's factory was inspected by the Dy. Superintendent of Central Excise Cannanore sometime in November, 1962. He wrote to the appellant on November 14, 1962 as follows "On a verification at your mill premises it was noticed that the single yarn produced are double the length of a standard hank of 840 yards. As the exemption of duty on yam applies only to standard hanks of 840 yards in length, the double hanks produced by you will not be eligible for exemption". In reply to that letters, the appellant informed the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks which do not contain more than 1000 metres of yarn in plain (straight) reel". In the notifications issued under rule 8(1) either on June 13, 1962 or on September 15, 1962 (Exh. P-2 and P-3), the word 'hank' was not defined. One of the dictionary meaning given to the word 'hank' is 'circular loop or coil'. The stand taken by the department is that the word 'hank' had acquired a special meaning in commercial circles i.e. a circular loop or coil of cotton yarn 850 yards in length and we must give that meaning to the word 'hank' in Exts. P-2 and P-3. After unsuccessfully contesting the demands made by the department in departmental proceedings, the appellant moved the High Court of Kerala under Art. 226 of the Constitution to quash the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionary meaning ? We have definite and positive evidence on record to show that the authorities who issued those notifications did not use the word 'hank' as understood in commercial circles. Otherwise the notification issued by the Government on February 16, 1963 becomes meaningless. That notification not only explains the term 'hank' as meaning a 'hank' which does not contain more than 768 metres of yarn in plain (straight) reel, it goes further and provides that the notification should be deemed to have taken effect from the 17th day of October, 1962. First the explanation given in the notification does not accord with the meaning given to the word 'hank' in commercial circles. It says that the word 'hank' means a coil of cotton yarn not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Counsel for the department did not support the impugned demand on the basis of the retros- pective effect purported to have been given to the explanation referred to earlier by the notification dated February 16, 1963 (Exh. P-12) for obvious reasons. The rule making authority had not been vested with the power under the Central Excise and Salt Act to make rules with retrospective effect. Therefore the retrospective effect purported to be given under Exh. P-12 was beyond the powers of the rule making authority. For the reasons mentioned above, we allow this appeal and quash the impugned demand-. The respondents shall pay the costs of the appellant both in this Court as well as in the High Court. Appeal allowed - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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