K.L. Rekhi, Member (T)

1. A common issue is involved in all these four appeals and they relate to the same appellants. They are, therefore, being disposed of by this common order.

2. The appellants manufacture both pure wool tops as well as blended wool tops and use them further in the manufacture of woollen yarn and woollen fabrics within their factory. Pure wool tops are first produced out of natural wool which are then mixed with synthetic/cellulosic fibres to make blended wool tops. The substantive issue involved in these appeals is whether the appellants should discharge their duty liability under item 43 of the Central Excise Tariff at the pure wool top stage or at the blended wool top stage. This item reads as under:

"43 WOOL TOPS and carded gilled slivers containing, in either case, more than fifty percent by weight of wool calculated on the total fibre content."

In these proceedings we are concerned only with those blended wool tops which contained more than 50 percent by weight of wool.

3. During the material period (1980-81 to 1983-84), the appellants paid the duty at the pure wool top stage. The Collector has held that the duty was legally payable at the blended wool top stage, that is, the stage at which wool tops were taken for manufacture of another commodity woollen yarn (tariff item 18B). However, while so holding, the Collector has not demanded the full duty again. He has only asked for the difference between the pure wool top stage duty and blended wool top stage duty, by giving credit to the appellants for the duty already paid. On this basis, he has confirmed four demands -- one for each of the four financial years 1980-81, 1981-82, 1982-83, and 1983-84 -- totalling in all about Rs. 18.72 lakhs against the appellants. He has also held them guilty of unauthorized removals of blended wool tops without payment of the duty due and other attendant violations and imposed penalties totalling Rs. 2.75 lakhs on the appellant, under Rule 173Q of the Central Excise Rules, 1944. The appellants are in appeal against these demands and penalties. They informed us that from September 1985 they have been paying duty at the blended wool top stage under protest.

4. In order to facilitate a proper understanding of the rival contentions, we set down below chronologically the developments of this case as presented to us by both sides. During the hearing before us (as also before the Collector earlier), the appellants relied on certain proceedings going on separately against their competitor in the same Collectorate -- M/s. Modella Woollen Mills. We have mentioned these proceedings also in our Chronological chart at the proper place so that the setting of facts at any given time remains clear: