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1994 (1) TMI 107 - SC - Central Excise
Issues:
- Whether duty should be levied on single yarn in the manufacturing process of fabrics. - Whether single yarn and doubled/multifolded yarn are considered as the same goods for the purpose of excise duty. Analysis: 1. The appellant, engaged in fabric manufacturing, argued that duty should not be levied on single yarn as it pays duty on doubled/multifolded yarn. The Assistant Collector issued a notice challenging this stance, stating that single yarn is a fully manufactured commodity attracting excise duty. 2. The Assistant Collector rejected the appellant's explanation, emphasizing that excise duty is leviable on the product as soon as it is completely manufactured. The appellant's contention that single yarn and doubled/multifolded yarn are the same goods was dismissed. 3. The Appellate Collector sided with the appellant, but the Revenue appealed to the Tribunal. The Tribunal, based on previous decisions, ruled that yarn is fully manufactured at the spindle stage, and multifolding is a step towards fabric manufacture. 4. In the subsequent appeal, the appellant's counsel argued that single yarn and doubled yarn are identical goods, relying on a previous court decision. However, all authorities affirmed that single yarn is fully manufactured and dutiable, irrespective of its use in fabric production. 5. The Tribunal's finding that single yarn attracts duty was upheld. The argument that duty cannot be levied twice on the same goods was rejected, emphasizing the dutiability of single yarn even in a continuous manufacturing process. 6. The judgment clarified that the focus was on whether single yarn attracts duty, not on the nature of doubled/multifolded yarn. The Tribunal's decision that single yarn is dutiable, despite its use in fabric manufacturing, was deemed correct. 7. Consequently, the appeal was dismissed, with no costs awarded. The judgment reaffirmed the dutiability of single yarn in the fabric manufacturing process, regardless of its subsequent processing stages.
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