JUDGMENT
M.B. Shah, J.
1. Petitioner M/s. Kamlesh Corporation, which is a partnership concern, has filed this petition wherein it is prayed that the show cause notice dated 24th November 1976 which is at Annexure ‘B’ issued by the Superintendent, Central Excise, Range IX, Division I, the order dated 2nd August, 1977 (Annexure ‘D’) passed by the Assistant Collector, Central Excise, Division I, Ahmedabad, and the order dated 17th July 1979 (Annex. ‘B’) passed by the Appellate Collector, Central Excise and Customs, Bombay, be quashed and set aside.
2. The dispute in this petition is whether item High Density Polythylene Tapes (HIP sacks) manufactured by the petitioner falling under Central Excise Tariff item No. 18 were exempted from payment of excise duty under notification No. 164/72 dated 10th July 1972.
3. Mr. Gupta, learned advocate appearing on behalf of the petitioners, submitted that the Customs, Excise & Gold (Control) Appellate Tribunal has decided the matter holding that HIPE tapes were not man-made filament yarn falling under Item 18-CET, but were articles of plastic falling under Item 15A(2) and were exempt under Notification No. 68/71-CE. He submitted that against that order Special Leave Petition was filed before the Supreme Court and the Supreme Court had dismissed the appeal. Thereafter the Central Government had issued a circular which he has produced at Annexure T to the additional affidavit filed by the petitioner in Special Civil Application No. 3366/79 which reads as under:
Below copy of Ministry’s letter F. No. 198/18/SC/88-A.U. dated 23.2.1984, addressed to all Collectors of C.Ex. Customs Appeals.
Sub: Civil Appeal No. 8369 of 1983 filed against CEGAT Order No. D-18/82 dated 30.12.1982 passed in Appeal No. ED(SL)(T) No. 5/82 D in the matter of Shree Radhe Industries Kalol v. The Collector of Customs & Central Excise Ahmedabad regarding
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I am directed to inform you that an appeal in above-mentioned case was filed before the Hon’ble Supreme Court of India on the 7th September 1983. Record of proceedings dated 21.10.1983 in the subject C.A. No. 8369 of 1983 passed by the Supreme Court of India is reproduced below for your information:
The Civil Appeal is dismissed on merits.
2. The basic issue involved in this case was:
(i) Whether high polythelene tapes are classifiable under item 18 of the First Schedule to the Central Excises & Salt Act, 1944 and excise duty is leviable on them; OR
(ii) They fall under Tariff item 15A(2) of the First Schedule to the said Act and exempt from duty under Notification No. 68/71-CE.
The Customs, Excise & Gold (Control) Appellate Tribunal had allowed the appeal of the party on the ground that HIPE tapes were not man-made filament yarn falling under Item 18-CET, but were articles of plastic falling under Item 15A(2) and exempt under Notification No. 68/71-CE.
F.No. 15A(8)l/84/TH/Bombay.
No affidavit-in-reply is filed on behalf of the respondents. In view of the aforesaid Circular this petition requires to be allowed. As per the Circular HIPE tapes would fall under Tariff Item 15A(2) and are exempt under Notification No. 68/71. Hence the order passed by the Assistant Collector, Central Excise, Division I, Ahmedabad, holding that HIPE tapes were falling under Central Excise Tariff Item 18 and as they were not used in the manufacture within the factory of production, the petitioner was required to pay excise duty as demanded in the notice along with the penalty, requires to be quashed and set aside. Consequently the order passed by the Appellate Collector, Central Excise and Customs, Bombay, confirming the said order also requires to be quashed and set aside.
4. In the result, the petition is allowed. The impugned order Annexure “D” dated 2nd August 1977 passed by the Assistant Collector, Central Excise, Division I, Ahmedabad, and the order dated 17th July 1979 passed by the Appellate Collector, Central Excise and Customs, Bombay in Appeal No. 469/79 are quashed and set aside. Rule made absolute to the aforesaid extent with no order as to costs.