S.D. Jha, Member (J)

1. These two Appeals-one a Revision Application presented to Government of India and transferred to the Tribunal as an appeal presented before it and the other an appeal to the Tribunal- raise common questions of fact and law and are disposed of by this common order.

2. The present proceedings are the outcome of show cause notices dated 6-2-1981 (Annexures 2 and 3) and 2-3-1982, the first two issued by the Assistant Collector of Central Excise, IDO, II Divn. Visakhapatnam and the last by Superintendent, Central Excise, Range VI, Visakhapatnam. By show cause notices dated 6-2-1981 it was proposed to classify the appellant's product coloured polystyrene compounds' under residuary Tariff Item No. 68 for the period 18-6-1977 to 10-8-1980 (Annex. 2) and 11-8-1980 to 31-12-1980 (Annex. 3). The details of the duty demanded are set out in annexures to show cause notices. Show cause notice dated 2-3-1982 relates to period 1-11-1981 to 31-1-1982 and is made on the basis of RT 12 returns. In respect of the afore-described product the show cause notice sets out the quantity and duty demanded.

3. The aforesaid show course notices and the demands arise against appellants in the following circumstances.

The appellants are inter alia engaged in manufacture of Polystyrene (uncoloured and coloured) in their factory situated at Venkatapuram in Visakhapatnam. The appellants sell a major part of their total manufactured uncolored polystyrene to the consumers and the balance is used in the coloration plant of the appellants for further treatment of uncoloured polystyrene with pigments, stabilizers and lubricants to prepare coloured polystyrene. The appellants in 1972 represented that polystyrene coloured is not liable for excise duty at this stage and is liable to duty only at the uncoloured stage. The Assistant Collector of Central Excise, Visakhapatnam, by Order-in-Original dated 9-5-1974 held that coloured polystyrene is excisable and assessable under Tariff Item No. 15A(1)(ii) of Central Excise Tariff and is chargeable to duty under the said Item at the price at which coloured polystyrene is sold. On appeal the Appellate Collector of Central Excise, Madras, by Order-in-Appeal dated 26-12-1974 rejected the appellants' claim and upheld the order of the Assistant Collector. Revision application against the Order-in-Appeal filed before the Government of India was also not successful and was rejected. The appellants then approached the Delhi High Court in its Writ jurisdiction being Civil Writ No. 564/1977. The Delhi High Court relying on a letter issued by the Central Board of Excise and Customs relating to PVC compounds (and there is no dispute that the product in question is such a compound) held that excise duty payable for the period before 17th June, 1977 will be payable not on the modified polystyrene but on the natural polystyrene. The High Court issued writ in the following terms :

"In the result, we issue a writ as prayed for by the petitioners quashing the demand for excise duty for the period up to 17th June, 1977. However, excise duty will be payable for this period calculated on the value of the natural polystyrene. In fact, from the statement filed and the facts stated earlier, this duty has already been paid and only the question of excess, whether paid or not paid is involved in this petition. We clarify that the assessment of excise duty on the product coloured polystyrene is to be assessed on the value of the natural polystyrene for the period up to 17th June, 1977 and the authorities should allow refund or demand payment as the case may be on this basis. As far as the future period after 17th June, 1977 is concerned, we have issued no writ or directions except to say that the stay order will continue as passed in the interim order subject to the decision of the authorities up to the revisional stage and subject to the condition that the Bank guarantee for Rs. 16,00,000/- is renewed up to the period those revi