Judgment

KANIA, J.: - This is an appeal against the judgment of a Division Bench of the Madhya Pradesh High Court, Jabalpur (Indore Bench) in M. Petition No. 104 of 1984. The appeal is filed at the instance of the Union of India, Collector of Central Excise, Indore and two other excise officers. The respondents are the original petitioners in the aforesaid petition. We propose to refer to the parties by the description in the petition.

2. The facts necessary for the disposal of this appeal can be shortly stated.

3. The petitioner No. 1 is a Company manufacturing spun yarn. According to the: petitioners, in the manufacture of the said product they use as raw material cellulosic fibres and non-cellulosic fibres. Sometime prior to 7th July, 1983, the petitioners filed a classification list in respect of the spun yarn manufactured by them showing the same as covered by Item No. 18(III)(i) in the First Schedule to the Central Excises and Salt Act, 1944 (referred to hereinafter as the "Central Excises Adt"). The said schedule is generally referred to as the "Central Excises Tariff". This classification was on the basis that the spun yam was manufactured by them out of non-cellulosic synthet