Excise duty on textured waste arises only at finished and marketable stage; earlier demand and penalty cannot stand.

Central excise duty on textured dyed waste or textured waste was treated as chargeable only when the goods reached a finished and marketable condition, not at the intermediate take-up stage. The Court noted that the departmental circular and trade notice accepted this position, so the objection that duty was recoverable earlier no longer survived. A penalty notice founded on alleged non-accounting at the intermediate stage therefore also lacked support, and the impugned notices were set aside.

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Issues: Whether central excise duty on the textured dyed waste or textured waste was payable at the take-up stage or only when the goods were in finished and marketable condition, and whether the consequential penalty notice could stand.

Analysis: The common controversy in all the petitions was the stage at which excise duty became chargeable. The departmental stand was that duty was recoverable at the take-up stage, while the petitioners relied upon the accepted administrative clarification that duty was payable only when the product had reached the finished and marketable stage. In view of the circular and the trade notice placed before the Court, the departmental objection no longer survived, and the penalty based on alleged non-accounting at the intermediate stage also lacked support.

Conclusion: The duty could not be collected at the take-up stage, and the notices, including the penalty notice, were liable to be quashed.

Final Conclusion: The petitions were allowed and the impugned notices were set aside without costs.

Ratio Decidendi: Where the competent departmental clarification accepts that excise duty is payable only upon the goods reaching a finished and marketable condition, a demand or penalty predicated on collection at an earlier intermediate stage cannot be sustained.

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