9911796707
TMI Blog1996 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... case of doubled or multifolded yarn, on the weight of doubled or multifolded yarn and no excise duty was being paid on the single yarn which was being used for doubling or multifolding. A show cause notice dated 4th September, 1982 was issued by the Superintendent of Central Excise asking the respondent to pay a sum of Rs. 35,190.96 as central excise duty which had been short paid during the year 1978-79 on the ground that it had utilised 4,56,456.10 kgs. of single ply yarn for doubling process without payment of duty. 3.The respondent filed its reply dated 10th September, 1982, inter alia, contending that there had neither been any removal nor any utilisation of the yarn resulting in the production of a new commodity and, therefore, duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded on behalf of the appellant that the duty was payable when the single ply yarn was manufactured. It is not in dispute that at the stage of the manufacture of the single ply yarn, there comes into existence an excisable item. The respondent manufactures single ply yarn and it is only thereafter, if required by its customers, that the said yarn is doubled or multifolded, as the need arises. Mere doubling or multifolding of the single yarn which is manufactured does not bring into existence a new product. The single yarn which is manufactured is an excisable item and would be subject to duty upon its manufacture. 8.It is immaterial, in view of Rule 9(1) of the Central Excise Rules and Section 49 of the Act whether the yarn so manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the same has been doubled or multifolded. Doubling or multifolding of the same yarn does not bring into existence a new product and no duty is leviable at that stage. 9.Learned Counsel for the respondent sought to place reliance on the decision of this Court in Bhilwara Spinners Ltd. v. Collector of Central Excise [1996 (82) E.L.T. 442 (S.C.)] in support of his contention that the respondent was liable to pay duty on the doubled yarn and no duty ought to be levied on the single yarn. In our opinion this judgment can be of little assistance to the respondents. 10.In Bhilwara Spinners case the company was engaged in the manufacture of fabrics. For that purpose it manufactured four types of yarns. The yarn when produced was a single y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in J.K. Spinning's case (supra). In view of the fact that an excisable item comes into existence with the manufacture of a single ply yarn it becomes liable to pay excise duty at that stage itself. The respondent cannot be allowed to contend that the levy of excise duty is postponed to a point of time when the yarn is removed after doubling or multifolding. The liability to pay excise duty arises at the first stage itself, namely, at the time of manufacture of single ply yarn. This being so the demand raised by the Assistant Collector was not invalid. 12.For the aforesaid reasons the appeals are allowed. The judgment of the Tribunal is set aside and the decision of the Assistant Collector of Central Excise is restored. Result of this wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
