Judgment

SABYASACHI MUKHARJI, J.-This is an appeal under Section 35-L(b) of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) against the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal) dated May 8, 1984.

2. The appeal is by the revenue. The respondent, Decent Dyeing Co., was dyeing acrylic yarn on job charges. The acrylic yarn was being received by the respondent from traders in the market or from the manufacturers of hosiery goods and were returning the same to them after completing the required process. The respondent was paying duty at the rate of Rs 10 per kg. in terms of Notification No. 125/75-CE dated May 12, 1975 on the presumption that base yarn had discharged duty liability before it was received for dyeing. A show cause notice requiring the respondent to show cause to the Assistant Collector of Central Excise as to why central excise duty amounting to Rs 4300 at Rs 24 per kg. leviable on 180 kgs. (as applicable to base yarn under tariff Item 18(i) of the Central Excise Tariff) should not be demanded under Rule 9(2) of the Central Excise Rules, 1944, was issued to the respondent. The Assistant Collector of Central Excise directed the respondent to deposit an amount of Rs 4300 on the basis of the demand of duty at Rs 24 per kg. on 180 kgs. and directed the respondent to deposit the said amount under the proper head. On appeal, the Appellate Collector of Central Excise confirmed the said demand.

3. There was an appeal and the Appellate Tribunal upheld the contention of the respondent. The Appellate Tribunal found that the case related to a demand for payment of differential duty for the period May 1976 to July 1976 with reference to texturing of base acrylic yarn received by the respondent from the manufacturers of such base yarn. The respondent, the Tribunal held, had cleared such textured yarn on payment of duty at Rs 10 per kg. claiming the benefit of Notification No. 125/75. The differential duty payment was Rs 24 per kg. leviable on the base yarn. The respondent denied their liability but it was upheld as mentioned hereinbefore. It was contended on behalf of the appellant before the Tribunal that duty on base yarn was payable by the manufacturers of the base yarn only and the burden of showing that the said duty had not been paid by the manufacturers was on the revenue. The authorities had, however, held that the appellant was liable to pay the differential duty since the appellant had failed to prove the payment of duty on the base yarn and, therefore, the said orders were bad. On the other hand, on behalf of the revenue, it was contended that it was for the respondent to prove that the duty had been paid on the base yarn and if the appellant was paying the duty of Rs 10 per kg. only under notification relied upon and in the absence of proof of payment of duty, the base yarn, the orders of the lower authorities making the respondent liable to pay the duty were correctly passed. The Tribunal found that the respondent was not the manufacturer of base acrylic yarn. The work done by the respondent on the base yarn was by way of texturising the same. In respect of the same, the duty payable on the textured yarn produced out of base yarn is the duty for the time being leviable on the base yarn, if not already paid, plus Rs 20 per kg. Under Notification No. 125/75, the duty was reduced to the duty for the time being leviable on the base yarn, if not already paid, plus Rs 10 per kg.

4. In this connection, it is relevant to refer to Notification No. 125/75. The notification, which was issued under sub-rule (1) of Rule 8of the Central Excise Rules, 1944, stated that the government exempted the texturised yarn of the description specified in column (3) of the Table annexed thereto and falling under sub-items of Item 18 of the First Schedule to the Act as are specified in the corresponding entries in column (2) of the