( 1 ) IN this group of appeals filed by Union of India (hereinafter referred to as the Revenue) the principal question which arises for our consideration is whether the respondent Mills original plaintiffs (hereinafter referred to as the Mills) are entitled to refund of excise duty paid by them on blended yarn manufactured by them which has been held to be illegal by a Division Bench of this Court in Special Civil Application No. 1058 of 1972 decided on 15/01/1976 (reported in CENCUS 1976 Volume-IV P. 25-D)

( 2 ) THE Mills produced blended yarn with the combination of certain percentage of synthetic staple fibre and certain percentage of cotton fibre. The proportion of blending was not uniform in all the Mills. It had also changed from time to time in different Mills. However there is no dispute that the Mills manufactured or produced blended yarn with the combination of synthetic staple fibre and cotton fibre and blended yarn produced by the Mills was used by almost all the Mills themselves for manufacture of fabric popularly known as art silk fabric. The production of blended yarn was commenced by different Mill at different times. The claim for refund of excise du