Yarn duty at spindle stage and adjustment of excess payment on double yarn were accepted; fresh levy was rejected.

Duty was not leviable again on double yarn where yarn duty had already been paid at the spindle stage, consistent with the Supreme Court position applied by the Tribunal; the demand on that count was therefore unsustainable. For the remaining notices, the Tribunal accepted that duty had already been paid on clearance of double yarn and that Rule 49A permitted payment at the stage of clearance of fabrics. It held that the duty already paid could be adjusted against the duty payable, rather than requiring a fresh payment followed by refund proceedings, and remanded the matter for adjustment after hearing the assessee and accounting for any shortfall.

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Issues: Whether duty was payable again on double yarn when duty had already been paid at the spindle stage or on clearance, and whether the duty paid on double yarn could be adjusted against duty payable on single yarn at the spindle stage.

Analysis: The demand relating to double yarn was held unsustainable in view of the binding Supreme Court position that yarn duty is payable at the spindle stage and no further duty is leviable on double yarn. For the remaining notices, the duty had already been paid on yarn at the time of clearance of double yarn, and the Tribunal accepted the assessee's explanation that Rule 49A permitted payment at the stage of clearance of fabrics. In these circumstances, the Tribunal found that the duty already paid could be adjusted against the duty payable, rather than compelling a fresh payment followed by a refund claim.

Conclusion: The demand on double yarn was not sustainable, and the matter was remanded to the Deputy Commissioner for adjustment of duty already paid against the duty payable, with an opportunity of hearing to the assessee and liability to make good any shortfall after adjustment.

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