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TMI Blog2001 (4) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... amprakash Spinning Mills Ltd. 2. Century Textiles spins cotton yarn. It has filed appeals against the orders of the Commissioner (Appeals) confirming the orders of the Assistant Commissioner that in computing the value of yarn captively consumed in weaving fabrics, it is the value of the sized yarn that has to be considered, and not the value of the yarn before sizing. The clearances took place between May 1995 and February 1996. 3. It is necessary to consider the history of judicial decisions relating to this aspect. The first of the decisions that we are concerned with is that of the Delhi High Court in J.K. Spinning Weaving Mills 1983 (12) E.L.T. 239. One of the points before the Delhi High Court was whether levy of duty could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note. 5. The reasons that the Commissioner (Appeals) advances is that sizing would be included in any other process mentioned in Note 2 to Chapter 52, after specifying various processes. The Tribunal has considered this aspect in Bombay Dyeing and Manufacturing v. C.C.E. - 2000 (120) E.L.T. 182, and it noted that the Board itself, in its order passed under Section 37B dated 27-3-1999 [reproduced in 1999 (114) E.L.T. T-50] had held that duty on yarn, which is sized before it is taken up for weaving in a composite mill will be leviable before sizing. It had noted that while the order itself would take effect only prospectively from its issue, the reasoning given in that order would apply to a situation in which the note to Chapter 52 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive consumption, it would follow that it is the same yarn which is liable to duty for home consumption. We have no quarrel with this proposition. In fact, the Bombay High Court in its judgement in Union of India v Swan Mills Ltd. - 1991 (56) E.L.T. 44 had considered the judgement of the Delhi High Court in J.K. Cotton and Spinning Mills v. Union of India and took the view that the sentence in paragraph 30 of the order that if sized yarn is cleared for home consumption, it would attract duty would be in the nature of obiter dicta not relevant in deciding the issue, and held that duty was leviable on the weight of the unsized yarn, and not on the sized yarn. 9. This does not help the appellant's case. During the relevant period, the duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is not the weight of the yarn but the value i.e. the price at which the goods were sold. This is the basis for assessment under Section 4 of the Act. In making that assessment, the fact that one or more process involved did not amount to manufacture would not be of any significance. What the assessing officer should consider is the sale price of the final product. The reliance by the department on the Supreme Court's decision in Siddhartha Tubes Ltd. v. C.C.E., 2000 (115) E.L.T. 32 in which the Court upheld the view of the Tribunal that, notwithstanding the fact that galvanising not a process of manufacture, the cost of galvanising done by a manufacturer upon goods after he manufactured and cleared them on payment of duty would form ..... X X X X Extracts X X X X X X X X Extracts X X X X
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