TMI Blog1973 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... . 18A to the first schedule to the Central Excises and Salt Act, 1944, (herein to be called 'the Act'). The petitioners, however, contend that at the time of discussion of the Bill in Parliament the then Finance Minister in his speech on the budget proposal of that year stated that that entry would not apply to yarn in hanks used in waving on handlooms such as Dhoties, sarees and other common varities of cloth. Accordingly, pursuant to the statement made by the Finance Minister the Government issued notification No. 48/61, dated the 1st March, 1961, exempting cotton yarn, if issued out of factory in hanks from the whole of the excise duty leviable thereon. The petitioners state that the above said notification was follwed by a series of notifications. The petitioners contend that the position in regard to levy of excise duty on cotton yarn immediately after the issue of notification No. 169/62, dated 15th September, 1962, Annexure 'A', was that single yarn, whether grey or bleached and grey multiple fold yarn, if cleared out of the factory in hanks of 17 or more counts but less than 35 counts and yarn of less than 17 counts, was granted complete exemption from duty. It is further c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h day of August, 1962. The precise contention of the petitioner is that notification Annexure 'B' was by way of amendment of the earlier notification dated the 15th September, 1962, Annexure 'A' and that the department by executive instructions could not enforce the notification, Annexure 'B', with retrospective effect by amending the earlier notification as by giving retrospective effect to the latter notification, the department had claimed duty by the impugned demand notice, Annexure 'C'. Further, the challenge to the demand notice is grounded on the plea that according to the Mercury Dictionary of Textile Terms the length of yarn in hank varies for different Mills and for different purposes. According to the expert opinion yarn in hanks refers to the form in which the yarn is presented for further process and not for a defined length and all reel yarn whether single or double, cross or plain, should be considered as hank yarn. 6.To the above averments of the petitioners the reply of the department filed through Shri J.P. Sinha, Assistant Collector, Central Excise Division, New Delhi, is that vide notification dated 1st March, 1961, exception was granted to cotton yarn of coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explicit the meaning commonly assigned to the term 'hank' in the textile industry or whether it is by way of amendment of the earlier notification, Annexure 'A' and thus cannot be given effect retrospectively. 8.Taking up the first contention, Shri Rameshwar Dial, learned Counsel for the petitioners, submitted that according to notification issued on 1st March, 1961, as stated in para 4 of the writ petition, the view taken was that the term 'hank' did not embrace within its ambit any measure of length. He submitted that the term 'hank' was understood to mean yarn irrespective of the length of the yarn. It was contended that if the contention of the department was to be accepted that the term 'hank' always meant 768 metres (840 yards) where was then the occasion for amending notification, Annexure 'A', by issuing the subsequent notification dated the 16th February, 1963, Annexure 'B'. 9.It is futile for the petitioner to contend that the term 'hank' means yarn on a particular hank or the type of reel irrespective of the yarn as that was not the stand taken by the petitioners at the time when they filed representation against the impugned levy of excise duty. Annexure R/2 is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12.The word 'hank' is defined as under in some of the dictionaries and the Manual of Departmental Instructions on Excisable Manufactured Products defined as under :- "A general term for a reeled length of yarn. In calculating the counts of yarn, a definite length is assigned to the hank for each type of yarn. See counts of yarn". "Counts of yarn" in the above-said dictionary is defined at page 204 as follows : - "A number which designates the size of a yarn. Usually a count represents the number of units of length contained in a unit of weight, but in certain classes of yarn the count represents the number of units of weight in a unit of length. The cotton hank - 840 yards; unit of weight 1 lb. The count is the number of hanks of 840 yards which weight 1 lb." In the Mercury "Dictionary of Textile Terms", the word 'count' is defined as under : "The number of yarns is termed the 'count' the cotton system is based on 840 yards to the hank, and the number of hanks that weight, 1, lb…… ecals the count, thus 10's cotton 10 ´ 840 yards per lb. There are numerous systems in use for the numbering or counting of yarns as given under 'yarn count'." 13In the "Manual of Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton yarn issued in hanks of the various types of counts mentioned in column "description". Despite the fact that term "hank" was fairly understood in the commercial community and industry of textile goods, the petitioners and some other textile mills represented to the Central Board of Excise and Customs that the word "hank" was never defined in any of the notifications, as mentioned in para 3 of the petition. The petitioners have made a special reference of this representation in para 6 of the petition. It was probably on this representation and with a view to making the position explicit about the term "hank" as was generally understood in the textile industry to be implied in the said expression that notification, Annexure 'B', was issued wherein the explanation No. II was added to the effect that the term "hank" meant hank which does not contain more than 768 metres of yarn in plain (straight) reel. Since the term "hank" was also used in the earlier notification, Annexure 'A', it at all times was understood to mean yarn with reeled length of 768 metres and having regard to the long usage the term 'hank' had attained the significance of a term of art in the textile trade and ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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