Double taxation on processed wool waste was rejected where garnetting and carding had already converted it into fibre.

Waste subjected to garnetting and carding was treated as having been converted into fibre, making duty leviable at that processing stage on the small manufacturers who undertook it. Once fibre had already emerged and duty, if any, attached at that point, later processing by the mills was only further conversion of fibre and did not justify a second levy on the same material. The record also noted that similar garnetted and carded materials purchased from small-scale manufacturers were not being charged again when used by other woollen mills. The petitioners were therefore not liable to duty, and the penalty and fine in lieu of confiscation were remitted in full.

---

---

Issues: Whether waste subjected to garnetting and carding was converted into fibre so as to attract duty as fibre, and whether the petitioners were liable to duty, penalty, and fine when the material was further processed by the mills.

Analysis: Waste, upon garnetting and carding, was treated as having been converted into fibre, and duty was considered leviable at that stage on the small manufacturers who undertook that process. Once fibre had already been manufactured and duty, if any, had attached at that stage, the subsequent processing by the mills could only amount to further conversion of fibre into fibre and did not justify a second levy on the same material. The record also noted that other woollen mills were not being charged duty when they used similar garnetted and carded materials purchased from small-scale manufacturers.

Conclusion: The petitioners were held not liable to pay duty, and the penalty and fine in lieu of confiscation were remitted in full.

Final Conclusion: The revision application succeeded and the order-in-appeal was set aside, resulting in full relief to the petitioners.

---