( 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 duty which is the subject matter of these appeals is confined to the period prior to 16/03/1972 All the Mills paid excise duty on blended yarn manufactured by them for their own use under tariff item 18 or 18-A of the First Schedule to the Central Excises and Salt Act 1944 (hereinafter referred to as the Excise Act ). By the Finance Act 1972 the Excise Act was amended with effect from 16/03/1972 and by the said amendment tariff item 18-E was introduced in the First Schedule. The said tariff item 18-E reads as follows:"18e. Yarn all sorts of N. E. S.- It covers yarn containing partly synthetic staple fibre of non-cellulosic origin and partly wool or partly acrylic fibre or partly cotton fibre etc". It is not disputed that with the introduction of tariff item 18e blended yarn manufactured by the Mills was liable to excise duty. However the controversy is with regard to the excise duty collected by the Revenue prior to 16/03/1972 As pointed out above prior to that date the excise duty was paid under tariff item 18 or 18a.

( 3 ) THE Ahmedabad Manufacturing and Calico Printing Company Limited Ahmedabad (hereinafter referred to as Calico Mills) challenged the levy of excise duty on blended yarn by filing Special Civil Application No. 1058 of 1972 referred to above. The contention which was raised by the Calico Mills was that blended yarn produced by them did not fall under any of the tariff items and therefore no duty was leviable thereon. The Calico Mills is engaged in manufacture of fabric and was using blended yarn produced by it for manufacturing fabrics which as stated above is known as art silk fabric. The Division Bench of this Court consisting of J. B. Mehta and S. H. Sheth JJ. allowed the petition filed by the Calico Mills on 15/01/1976 holding that levy of excise duty on blended yarn prior to 16/03/1972 under tariff item 18 or 18a was clearly ultra vires. The Court directed refund of the excise duty lavied for three years prior to the institution of the petition which was instituted on 6/05/1972 It is the case of the Mills that it was as a result of this declaration of law made by this Court that they came to know that they were not liable to pay excise duty an blended yarn upto 16/03/1972 and that they had paid excise duty on blended yarn upto that date under mistake of law. The Mills therefore gave notices to the Revenue calling upon it to refund the excise duty paid on blended yarn upto 16/03/1972 which was alleged to have been illegally recovered from them. Since the Revenue did not refund the excise duty as claimed in the notices suits out of which the present appeals arise were filed by the Mills for recovery of excise duty paid by them on blended yarn upto 16/03/1972 Each of the Mills has claimed refund of entire excise duty paid on blended