G. Sankaran, Vice President (T)

1. These appeals arise out of, and are directed against, the common order-in-appeal dated 20-10-1981 passed by the Appellate Collector of Central Excise, Bombay disposing of four appeals filed before him. Initially, M/s. Kiran Spinning Mills (the appellants) had filed a single revision application before the Central Government against the said order and this was received in this Tribunal on transfer under Section 35-P of the Central Excises and Salt Act, 1944, (the "Act" for short), for disposal as if it were an appeal filed before the Tribunal. Later on, in accordance with the practice and procedure of this Tribunal, the appellants filed three supplementary appeals since there were four causes of action.

2. The appeals involve common issues of classification and are, therefore, disposed of by this common order. The distinctive features of the individual appeals will be dealt with at the appropriate stage(s).

3. The facts of the cases are that the appellants are engaged in the manufacture of different varieties of yarn by spinning of different fibres as well as by doubling/twisting of duty-paid spun yarn with rayon filament yarn. In the present matters, the dispute is about yarns obtained by doubling/twisting of duty-paid spun yarn with duty-paid rayon filament yarn. These yarns are marketed under different names.

4. The aforesaid yarns were being classified under Item No. 18-E of the First Schedule ("CET", for short) to the Act, prior to 18-6-1977, when, consequent upon the 1977 Budget changes, the department classified them under Item No. 68 CET. The appellants contested this classification.

5. The dispute is whether the subject yarns were classifiable under Item 68 CET as the department had done or they were non-excisable, as the appellants contend, since, according to them, mere twisting or doubling of duty-paid yarns did not amount to "manufacture", resulting in the coming into existence of any new product.

6. The Appellate Collector rejected the appellant's contention and held that the process of doubling/twisting of yarns amounted to "manufacture", resulting in the emergence of new commodity. He also held that the resultant yarns fell under Item No. 68 CET and not under any of the items specified for different types of yarns. Following this conclusion, he rejected all the appeals.

7. We have heard Shri Shankardas, Sr. Advocate, assisted by Shri M.G. Ramachandran, Advocate and Shri D.N. Kohli, Consultant, for the appellants and Shri K.C. Sachar, Departmental Representative, for the respondent.

8. In regard to certain demands [Section Nos. 11 to 23 as mentioned in para 4(e) of the impugned order dated 20-10-1981 of the Collector (Appeals) with reference to appeal No. V2(l8)3176/80 against Asstt. Collector's order No. CL/18/III/T.II/Kiran/78/l 1983, dated 30-9-1980], the appellants had urged before the Collector (Appeals) that the Assistant Collector had adjudicated upon the demands without giving them an opportunity of being heard though they had specifically requested for the same. Hence, it was urged that there had been violation of the principles of natural justice. It had been further urged before the Collector (Appeals) that the demand notices at Section Nos. 21 to 23 ibid had been adjudicated upon by the Assistant Collector even before the time limit given in the show cause notices for submission of the replies had expired. Violation of the principles of natural justice had also been alleged in respect of some of the demands mentioned in the Assistant Collector's order No. V(68)4.222/80/2142, dated 'nil' forming the subject of the Collector (Appeal)'s appeal file No. V2(68)/1268/81.

9. We note from para 10 of the impugned order that the Collector (Appeals) has found that the Assistant Collector had indeed violated the principles of natural justice. The Collector observes that it was incorrect on the Assistant Collector's part to have presumed that no useful purpose would be served by hear