' This order will dispose of two Writ Petitions bearing Nos. 2540 and 6478, both of 1980. These have been taken together as similar questions of fact and law arise therein.
2. The petitioners in the two writ petitions are public limited companies and are engaged in, alongwith other things, the manufacture of cotton yarn. On the 29th of June, 1978 the Federal Government issued a notification under section 12-A of the Central Excises and Salt Act whereby it exempted production and manufacture of cotton yarn from the levy of excise duty. On the night between 27th and 28th June, 1979 the Federal Government withdrew the said notification. As a result the cotton yarn again became subject to the levy of the excise duty. Just before the withdrawal of the notification a substantial quantity of yarn which had been produced while the notification of exemption was in force was lying in the godowns of the petitioners. The respondents proceeded to levy excise duty on the said stock also. To challenge the legality of the action by the respondents in this regard the petitioners have brought these writ petitions.
3. The main contention on behalf of the petitioners is that no excise duty could be levied in respect of the yarn manufactured while the notification of exemption was in force. Precisely this very question was considered by a Single Judge of this Court in Colony Thal Textile Mills Ltd. v. Assistant Collector, Central Excise and Land Customs (1). The view taken by the learned Single Judge was that the yarn manufactured during the continuance of the notification of exemption could not be charged with excise duty. The decision of the learned Single Judge was challenged by the Federal Government in an Intra-Court Appeal before a Division Bench (See 1. C. A. No, 73 of 1980). The Division Bench upheld the view of the learned Single Judge. I am bound by the decision of the Division Bench. Accordingly, I accept these writ petitions and declare that the levy of excise duty on the yarn manufactured while the notification of exemption remained operative is illegal and the petitioners are entitled to the refund of the duty which has been collected on the said yarn. The petitioners shall also have their costs of these petitions. {{FOOT NOTE}}
(1) PLD 1980 Lab. 377 {{FOOT NOTE}}