Single ply yarn dutiable on emergence; waste norm sustained where production records were inadequate.

Single ply yarn was treated as a manufactured product liable to duty at the stage of its emergence, and later doubling or multifolding did not create a new product; the contention that no removal had occurred was rejected. On the waste computation issue, the absence of proper records of issue and production justified sustaining the waste norm fixed by the authorities, with no clear basis shown for a higher norm except in one appeal where the figure was adjusted to 0.35%. The appeals therefore substantially failed, with only a limited modification on waste norm in one matter.

---

---

Issues: (i) whether single ply yarn used for making doubled or multifolded yarn was a manufactured product exigible to duty at the stage of its emergence; and (ii) whether the waste norm applied in computing duty was liable to be revised.

Issue (i): whether single ply yarn used for making doubled or multifolded yarn was a manufactured product exigible to duty at the stage of its emergence.

Analysis: The duty liability was examined with reference to the character of single ply yarn and the effect of its further doubling or multifolding. It was accepted that single ply yarn is itself a manufactured product, and that subsequent doubling or multifolding does not bring into existence a new product. The contention that no removal had taken place for the purposes of the excise rules was not accepted.

Conclusion: The duty liability at the stage of single ply yarn was upheld and the finding of the lower authorities on this issue was confirmed.

Issue (ii): whether the waste norm applied in computing duty was liable to be revised.

Analysis: The Tribunal found that the appellants had not maintained proper records showing issuance of single ply yarn for the manufacture of doubled or multifolded yarn. In that factual setting, the waste norm of 0.35% fixed by the authorities was held to be for all the appeals except one. In the specified appeal, there was no cogent reason to depart from the same norm and apply a different higher percentage.

Conclusion: The waste norm of 0.35% was upheld in all appeals except one, in which the norm was modified to 0.35% from the higher percentage applied by the authorities.

Final Conclusion: The appeals failed substantially, with only a limited modification confined to the waste norm in one appeal.

Ratio Decidendi: Single ply yarn is dutiable as a manufactured product at the stage of its emergence, and where the assessee fails to maintain proper production and issue records, the waste norm fixed on the available facts will ordinarily be sustained unless a clear basis exists for departure.

---