Excise duty on already assessed yarn cannot be reopened merely because it was later sold after winding or reeling.

Under Rules 9 and 49 of the Central Excise Rules, 1944, excise duty attaches at the time and place of removal, and deemed removal occurs once goods are assessed and assigned for use within the factory. Yarn on which duty had already been discharged at the spindle stage could not be reassessed merely because part of it was later sold after winding or reeling instead of being used for doubling. The later sale did not create a fresh duty liability, so the reassessment and additional demand were not sustainable and the appeal succeeded for the assessee.

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Issues: Whether excise duty could be reassessed and demanded again on yarn already duty-paid at the spindle stage when part of it was later sold after winding or reeling.

Analysis: Under Rules 9 and 49 of the Central Excise Rules, 1944, deemed removal occurs once the goods are assessed and assigned for use within the factory. Liability to duty arises at the time and place of removal, and where duty has already been discharged on the single yarn, there is no legal basis for reopening the assessment merely because the goods were later sold instead of being further used for doubling. The later sale took place after completion of the winding or reeling process, and that circumstance did not create a fresh duty liability.

Conclusion: Reassessment and additional duty demand were not sustainable; the appeal was decided in favour of the assessee.

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