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TMI Blog1981 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... f these composite mills. Sizing is a process as found from the materials which will hereafter be referred, which is applied to yarn when it is taken to the weaving department. Sizing is applied to yarn in order to strengthen the yarn so as to have proper strength at the time of weaving and it must be borne in mind that it is used only for the warp yarn for the weaving of fabric, weft being un-sized. If a manufacturer manufactures only yarn and then sells the yarn manufactured by it, the manufacturer is not required to size the yarn and yarn, a commercial commodity known to the trade, comes into existence without any sizing being required. It is therefore obvious that since it is the manufacture of yarn which is the taxable event for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there also it was held that sizing process is carried out to add some strength to the yarn, to undergo stress and strain of weaving. This size so added is removed completely after weaving and bleaching processes, to make the fabric suitable for dyeing, printing etc. The manufacture of yarn is completed the moment it reaches the marketable stage, which stage is the spindle stage or cone stage. The Collector considered the question from the angle as to whether yarn known as such in commerce and trade, has come into existence prior to the beaming and sizing and thereafter he observed :- "It is common day knowledge that yarn in the form of cones, pirns, bobbins, etc. is marketed frequently. It is in the case of composite mills that is to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he weight of the sized yarn cannot be taken into consideration for the purpose of levying excise duty on yarn. It is only the weight of the unsized yarn as it emerges at the spindle stage that has to be taken into consideration for the purpose of levying excise duty on yarn. 3. We, therefore allow the special civil application in each of the cases of this group and direct the respondents to refund the difference in excise duty between the weight of sized yarn and the weight of unsized yarn as explained above, if duty has already been collected. All demand notices issued without recognizing the difference between unsized yarn and sized yarn, so far as levy of excise is concerned, are also quashed and set aside. If money has already been co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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