ORDER
G. Sankaran, Sr. Vice-President
1. The Assistant Collector of Central Excise, Jullundur, passed an order on 12-11-1980, confirming a demand for Rs. 1,18,680/- against M/s. Mahavir Spinning Mills Ltd. Hoshiarpur (the respondents), as they had cleared 10,320 kgs. of acrylic yarn during the period from 22-6-1979 to 6-7-1979 but had not paid duty as required under Central Excise Notification No. 213/79, dated 23-6-1979. In appeal, the Collector of Central Excise (Appeals), New Delhi, by his order dated 2-6-1983, accepted the appellant’s plea that their case was covered by the provisions of Notification No. 146/81, dated 18-7-1981 issued by the Central Government under Section 11C of the Central Excises and Salt Act. On this basis, the Collector (Appeals) set aside the Assistant Collector’s order. It is against this order that the Collector of Central Excise, Chandigarh is in appeal before us.
2. Shri K.C. Sachar, D.R. reiterated the grounds taken in the Memo, of Appeal while Shri C.L. Beri, Counsel for the respondent submitted that the impugned order was well founded.
3. For appreciating the dispute involved in the present case, it is necessary to set out briefly the various notifications which are required to be considered. Notification No. 133/77, dated 18-6-1977 exempted woollen and acrylic spun yarn falling under Item No. 18B(i) of the First Schedule to the Central Excises and Salt Act from the whole of the duty leviable thereon subject to the condition that where the yarn had been spun wholly or partly out of acrylic fibre, it shall be liable to duty at Rs. 10 per kg. This duty was, by virtue of the proviso to the notification, not leviable provided it was proved to the satisfaction of the Proper Officer that such yarn was spun or produced out of acrylic fibre on which excise duty or additional duty of customs, as the case may be, had been paid at the rate of Rs. 30 per kg.
4. By Notification No. 213/79, dated 23-6-1979, the aforesaid proviso to the Notification No. 133/79 was omitted.
5. By Notification No. 224/79, dated 13-7-1979, the first mentioned Notification No. 133/77 was superseded and woollen and acrylic spun yarn was unconditionally exempted from the whole of the duty leviable thereon. It appears that there was a prevalent practice whereby between 23-6-1979 and 12-7-1979, no excise duty was being charged) on acrylic yarn, spun out of acrylic fibre, which had suffered excise duty or additional duty of customs at the rate of Rs. 30 per kg. This practice apparently was not in accord with the affect of the above notifications. However, in view of the prevalent practice, the Central Government issued Notification No. 146/81, dated 18th July 1981, which is reproduced below :-
” Notification
No. 146/81-Central Excise
GSR. In exercise of the powers conferred by Section 11C of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that woollen and acrylic spun yarns which have been spun or produced out of acrylic fibre on which the duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has been paid at the rate of thirty rupees per kilogram, were not liable to any duty according to a practice that was generally relevant of not levying such duty under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Banking) No. 133/77-Central Excise, dated the 18th June, 1977 as amended by the Notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 213/79-Central Excise, dated the 23rd June 1979, i.e. to say the period commencing on the 23rd June, 1979 and ending with the 12th July 1979 hereby directs that the whole of the duty of excise payable on such yarns, but for the said practice, shall not be required to be paid in respect of such yarns.”
6. The contention of the Appellant Collector, in brief, is that the Government has no power under Section 11C to direct refund of duties paid contrary to the practice of not levying such duty and that the notification issued under Section 11C of the Act authorised only non-recovery of duty which ought to have been, but was not, in fact, paid. It is no authority for refund of duties already paid prior to the date of issue of the said Notification.
7. The Collector’s contention is, on the face of it, unsupportable when the Central Govt. has issued a notification in exercise of its powers under Section 11C of the Act directing that where duty had not been paid in accordance with the prevalent practice, the said duty shall not be required to be paid. The plain corollary is that where duty had been paid, it ought to be refunded. Anv other view would place assessees who had paid duty at a disadvantageous position vis-a-vis assessees who had not paid duty. This evidently would not be permissible and we are clear in our mind that this is not the effect of the Notification either.
