Case: Adltya Mills Ltd Vs. Union Of India

2. According to the appellant, the PPRF yarn consists of two varieties of yarn on which duty has already been paid, namely, two plies of Polyester Spun yarn - PP and one ply of Rayon Filament yarn - RF, which are doubled together and the resultant yarn is referred to as PPRF yarn. The aforesaid classification list filed by the appellant was rejected and it was directed to file to file a fresh classification list showing PPRF yarn under tariff item 68 of the Central Excise Rules. The case of the appellant is that since it was not permitted to clear PPRF yarn without further payment of duty under tariff item 68 of the said Rules, on or from April 27, 1976, they started making clearance on payment of duty on PPRF yarn under protest3. Thereafter, in October 1978, the appellant filed refund claim for the period from April to September 1978 for a sum of Rs. 84, 651.77 collected by the revenue as duty on PPRF yarn under tariff items 68. The appellant Company, thereafter, received a show cause notice requiring it to show cause as to why the refund claim should not be rejected. The appellant Company filed its reply stating therein that the duty had already been paid on Polyester Spun Yarn, which was manufactured by it in its factory (under tariff item 18-E of the First Schedule of the Central Excises and Salt Act, 1944, hereinafter called the Act) and further that the appellant was purchasing Rayon Filament yarn, on which duty had already been paid (under tariff item 18-II) and that the appellant was only doubling two plies of duty paid Polyester Spun yarn with one ply of Rayon Filament yarn and no process of manufacture was carried out and further no new product came into being4. On or about July 3, 1979, the Assistant Collector of Central Excise rejected, the refund claim of the appellant despite the fact that a representation was pending before the Collector of Central Excise and Customs, Jaipur, against the action of the Inspector, Central Excise, in rejecting the classification list dated April 10, 1978 and demanding duty of excise on the PPRF yarn, on which duty has already been paid. In February 1980, the appeal filed before the Revisional Authority against the order of the Appellate Collector was transferred to the CEGAT under Section 35-P of the Act5. By the judgment in appeal, the Tribunal held that the goods in question, namely, PPRF yarn was taxable under tariff item 68 and there was no question of any refund being due to the appellant

Court's reasoning:
9. The Tribunal has found that indisputably a new yarn has come into being which is known in the market on the evidence adduced before the Tribunal, and that PPRF is treated differently from Polyester Spun yarn and Rayon Filament yarn. We are, therefore, of the view that the Tribunal rightly came to the conclusion that this is a separate and distinct item. If having borne the correct legal principles in mind and in the light of the facts and without ignoring any relevant or material fact, the Tribunal comes to a conclusion on a question of classification of an item for tariff purpose, in our opinion, that finding cannot and should not be interfered with in appeal before this Court. In that view of the matter the appeal cannot be entertained and is, therefore, dismissed.