Civil No 3 of 1983
Under Article 32 of the Constitution of India
WITH WP Nos
4OO 402 425 492 2493 2495 2526 2528 of 1983 and 1256 of 1987
Soli J Sorabjee Ravinder Narain DA
Dave and PH Parekh for the Petitioners
AK Ganguli TVSN Chari Ms Radha Rangaswamy and P Parmeshwaran for the Respondents
The Judgment of the Court was delivered by YOGESHWAR DAYAL J
This order will dispose of the aforesaid writ petitions under Article 32 of the Constitution of India
All these cases come under Item 181 andor 18 III andor 18E of the Tariff contained in the schedule attached to the Central Excise and Salt Act 1944 hereinafter referred to as the Act 
For facility of reference we are giving the facts of the case of Civil Writ Petition No 3 of 1983
144 This Writ Petition is stated to be covered by the decision of this Court in JK Cotton Spinning and Weaving Mills Ltd  another vs Union of India and others  and the surviving prayer in the writ petition is to declare that the duty of excise in respect of Tariff Item Nos 18 A a 18 III ii and 18E is to be levied and collected on the weight of the unsized yarn and not on the basis of the weight of the sized yarn
Before we deal with the objections of the learned counsel for the respondents it would be useful to examine the points which were involved in the aforesaid case of JK Cotton Mills
The appellants in the said case had a composite mill wherein it manufactured fabrics of different types
In order to manufacture the said fabrics yarn was obtained at an intermediate stage
The yarn so obtained was further processed in an integrated process in the said composite mill for weaving the same into fabrics
The appellants did not dispute that the different kinds of fabrics which were manufactured in the miff were liable to payment of excise duty on their removal from the factory
They also did not dispute their liability in respect of yarn which was also removed from the factory
It was the contention of the appellants therein that no duty of excise could be levied and collected in respect of yam which was obtained at an intermediate stage and thereafter subjected to an integrated process for the manufacture of different fabrics
On a writ petition by those appellants the Delhi High Court by its judgment dated 16th October 1980 held that yarn obtained and further processed within the factory for the manufacture of fabrics could not be subjected to duty of excise
It was the case of the appellants that in spite of the said decision of the Delhi High Court the Central Board of Excise had wrongly issued a circular dated 24th September 1980 purporting to interpret Rules 9 and 49 of the Central Excise Rules 1944 hereinafter referred to as the Rules  and directing the subordinate excise authorities to levy and collect duty of excise in accordance therewith
In the said circular the Board had directed the subordinate excise authorities that use of goods in manufacture of another commodity even within the placepremises that have been specified in this behalf by the Central Excise Officers in terms of the powers conferred under Rule 9 of the Rules will attract duty
As the said circular was being implemented to the prejudice of the appellants they filed the writ petition before the Delhi High Court inter alia challenging the validity of the said circular
During the pendency of the writ petition in the Delhi High Court the 145 Central Government by Notification No 2082 CE dated 20th February 1982 amended Rules 9 and 49 of the Rules
Section 51 of the Finance Act provides that the amendments in Rules 9 and 49 of the Rules shall be deemed to have and to have always had the effect on and from the date on which the Rules came into force ie 28th February 1944
After the said amendments of the Rules with retrospective effect the appellants amended the Writ petition and challenged the constitutional validity of Section 51 of the Finance Act 1982 and of the amendments to Rules 9 and 49 of the Rules
The High Court came to the conclusion that section 51 of the Finance Act 1982 and Rules 9 and 49 of the Rules as amended were valid
It was further held that the retrospective effect given by Section 51 of the Finance Act 1982 will be subject to the provisions of Sections 11A and 11B of the Act
It was further held that the yam which is produced at an intermediate stage in the mill of the appellants therein and subjected to the integrated process of weaving the same into fabrics will be liable to payment of excise duty in view of the amended provisions of Rules 9 and 49 of the Rules
But the sized yam which is actually put into the integrated process will not again be subjected to payment of excise duty for the unsized yarn which is sized for the purpose does not change the nature of the commodity as yarn
The Writ Petition was accordingly allowed in part as stated aforesaid and it was this decision which came up in appeal before this Court
This Court agreed with the Delhi High Court and upheld the vires of Rules 9 and 49 of the Rules as well as Section 51 of the Finance Act 1982
This Court also agreed with the High Court that the retrospective effect given by section 51 of the Finance Act 1982 will be subject to the Provisions of Sections 11A and 11B of the Act
This Court also agreed with the view of the High Court that the yarn which is produced at an intermediate stage in the mill of the appellants and subjected to integrated process of weaving the same into fabrics would be liable to payment of excise duty in view of the amended provisions of the Rules But this Court further agreed with the High Court the sized yarn which is actually put into the integrated process will not again be subjected to payment of excise duty for the unsized yarn which is sized for the purpose does not change the nature of the commodity as yarn
This Court observed at pages 720 and 721 of the report as under In the instant case the appellants are liable to pay excise duty on the yarn which is obtained at an intermediate stage and thereafter further processed in an integrated process for weav 146 ing the same into fabrics
Although it has been alleged that the yam is obtained at an intermediate stage of an integrated process of manufacture of fabrics it appears to be not so
After the yarn is produced it is sized and thereafter subjected to a process of weaving the same into fabrics
Be that as it may as we have held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity is liable to the payment of excise duty the yarn that is produced by the appellants is also liable to payment of excise duty
In our view the High Court by the impugned judgment has rightly held that the appellants are not liable to pay any excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics
No distinction can be made between unsized yarn and sized yarn for the unsized yarn when converted into sized yarn does not lose its character as yarn
 The petitioner herein on the other hand approached the Gujarat High Court and the Gujarat High Court by its judgment dated 30th July 1981 had before the issuance of the impugned circular dated 24th May 1982 taken the view that no duty can be levied on the weight of sizing material contained in yarn falling under Tariff Item No 18 111 or 18 E and directed that the duty levied should be refunded because the duty has been levied not on the basis of yam at the spindle stage but on the weight of the sized yarn
After the decision of the Gujarat High Court the Central Government had amended Rules 9 and 49 of the Rules and Section 51 of the Finance Act 1982 had made them effective retrospectively
The present writ petition filled in this Court had inter alia pleaded that the retrospective amendment of Rules 9 and 49 of the Rules as well as Section 51 of the Finance Act 1982 be declared as ultra vires of the Constitution
This Court upheld the validity of the Section as well as the retrospective applicability of the Rules but took the view that this would be subjected to the provisions of Sections 11A and 11B of the Act and at the same time declared that the appellants were not liable to pay excise duty on the yarn after it is sized for a purpose of weaving the same into fabrics
It will be noticed that under items 181 18III and 18E the measure is per kilogram
At this stage items 181 18111 and 18E of the Tariff may be noticed 147 18
I Man made fibres other than mineral fibres  i Non cellulosic Eighty five rupees per kilogram ii Cellulosic Ten rupees per kilogram 18III
Cellulosic spun yarn Yam in which man made fibre of cellulosic origin predomi nates in weight and in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power i not containing any manmade fibres of non cellulosic origin
six paise per count per kilogram ii containing man made fibres of non cellulosic origin
Eighteen Rupees per kilogram
Explanation 1 Count means the size of grey yarn excluding any sizing material expressed in English Count
Eighteen Rupees per kilogram 18E
Non cellulosic Spun Yam Spun discontinuous yarn in which man made fibres of noncellulosic origin other than acrylic fibre predominate in weight and in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power
Twenty four rupees per kilogram
148 Explanation  Explanation III under sub item III of item No 18 shall so far as may be apply in relation to this item as it applies in relation to that item
 It will be noticed from the aforesaid items that the measure for imposition of excise duty is by weight per kilogram in all the three items namely 181 18111 and 18E Therefore the aforesaid decision in JK Couon Mills will be applicable to all types of cases under Items 181 18111 and 18E After the decision of the Gujarat High Court instead of granting the refund the Superintendent of Central Excise Range IV Division V Ahmedabad issued impugned notices collectively annexed as Annexures B  and C  to the present writ petition in pursuance of the directives dated 24th May 1982 which are subject matter of challenge in the present writ petition
On behalf of the respondents Mr Ganguly learned counsel submitted that this Hon ble Court ought not to entertain the present writ petition under Article 32 of the Constitution
He however could not dispute that the matter is directly covered by the decision of this Court in the aforesaid case of JK Cotton Mills
These petitions were admitted to hearing in view of the pendency of the aforesaid appeal in the case of JK Cotton Mills and in view of the decision of the Delhi High Court which was appealed against in the aforesaid case of JK Couon Mills
Practically nine years have gone by now and the impugned show cause notices have been issued by virtue of the same directives which were subject matter of the aforesaid case of JKcotton Mills
In view of this peculiar fact it would not be in the interest of justice if the parties are directed to contest the individual show cause notices issued by the respondents in view of the aforesaid directives
In order to avoid multiplicity of proceedings involving time and expense we quash the impugned notices in all the cases
The result is that all the aforesaid writ petitions are accepted and the impugned show cause notices are quashed
There will be no order as to costs
GN Petitions allowed


Summary:
The dispute between the appellant and the respondent in respect of their Interests In certain properties was referred to arbitration by this Court and a retired Chief Justice of a High Court was appointed as the sole Arbitrator with direction to make a speaking award and the Arbitrator submitted his Award
Against this award the appellant objector filed objections under Section 30 of the  contending that the Arbitrator had misconducted himself in that he did not take into consideration several documents which were placed on record before him to support the objector s case and hence the award was invalid under clauses a and c of Section 30
Disposing of the Appeal this Court HELD  11
There is no infirmity on the face of the award which would entitle this Court to exercise jurisdiction under Section 30 of the 
The Arbitrator has made a speaking award setting out his reasons for the conclusions reached by him and has thus complied with the direction of this Court given earlier
56D 55E 12
The documents in question mainly relate to the rights and interests of the parties In the properties situate in that part which now belongs to the Dominion of Pakistan
Since they were refugees they had made certain claims under the law governing rehabilitation of displaced persons in respect of the properties left behind by them
The claim was sanctioned in the joint same of the objector s predecessor in Interest and the respondent in respect of the properties left behind by the family
On the strength of that 52 claim one of the houses was purchased in the said name
The Arbitrator however came to the conclusion that the property in question was purchased from the funds contributed by the objector s predecessor in interest and the respondent
The share of the objector was held to be 17th in the share of the predecessor in interest since deceased
Since the contribution made for payment of the price was not equal the Arbitrator allotted a larger share to objector s predecessor in interest and consequently the objector has got a share on the basis thereof when inheritance opened on the death of the predecessor in interest
55B DH 56A 13
It is clear from the award that the Arbitrator did not go into the rights and interests of the parties including the HUF in the properties left behind in the Dominion of Pakistan
That was not necessary because the fact that the claim was sanctioned in the joint name of the Objector s predecessor in interest and the respondent was never in dispute
The short question which the Arbitrator was required to consider was as regards the title of the properties which were the subject matter of the reference which included a house purchased on the strength of that claim
It is not necessary for the Court to go into the question of the rights and interests of the parties in the properties left behind in the Dominion of Pakistan since the Arbitrator was right that he was called upon to decide the interest of the parties in respect of two houses alone which were the subject matter of the reference
Therefore the Arbitrator had not misconducted himself by refusing to enumerate all those documents in question in his award because he was bound by the scope of the reference which was limited to the two houses and not the properties left behind in the Dominion of Pakistan by the parties
55F 56B C 2
In order to interfere with an award the Court must rind out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure such as the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award
It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on a disputed issue
The Court does not sit in appeal and does not reassess the evidence
Even if the Court feels that had it been left to it it would have assessed the evidence differently that would not be a valid ground for setting aside the award
56E G 3
Therefore in the facts and circumstances of the case there is no reason to interfere with the award which is made the rule of the 53 Court
56H 57A B Food Corporation of India vs
Joginder pal Mohinderpal  Anr 19892 SCC 347 and Hind Builders vs Union of India 1990 3 SCC 338 relied on