No duty on waste or loss of base yarn during captive texturising use, following the waste-duty principle.

Duty was not payable on base yarn said to have been lost or rendered waste during captive use in the texturising process, because the authorities had treated loss and waste as the same for duty purposes. The Tribunal applied the principle that no excise duty is attracted on waste, and relied on Modipon Ltd. on the same footing. On that basis, the alleged waste or loss of base yarn was outside duty liability, and the assessee's appeal was rightly allowed.

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Issues: Whether duty was payable on base yarn allegedly rendered waste during captive use in the texturising process.

Analysis: The dispute turned on whether the quantity of base yarn said to be lost in the course of manufacture could be treated as waste attracting duty. The Tribunal had found that the authorities were treating loss and waste as the same and that the factual situation was covered by the principle that no duty is payable on waste. The earlier decision in Modipon Ltd. was applied to the same effect.

Conclusion: Duty was not payable on the alleged waste or loss of base yarn, and the assessee's appeal was rightly allowed.

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