Grey yarn wastage during post-manufacturing processing is not exempt from excise duty without specific statutory relief.

Excisable grey yarn remained dutiable when removed for processing, and wastage arising during later dyeing and finishing of hand-knitting yarn was treated as a post-manufacturing loss. In the absence of a specific statutory provision or notification granting exemption or remission for such wastage, central excise duty could not be avoided. Notification No. 52/72-C.E. did not apply on the facts found, so the duty demand was upheld.

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Issues: Whether wastage of grey yarn arising after the spindle stage during dyeing and processing into hand-knitting yarn was entitled to exemption or remission from central excise duty.

Analysis: Grey yarn was excisable and dutiable when removed for processing. The wastage occurred during dyeing and finishing, which was a post-manufacturing process. In the absence of any specific statutory provision or notification granting exemption or remission for such wastage, the duty could not be avoided. Notification No. 52/72-C.E. did not assist the assessee on the facts found.

Conclusion: The wastage was not eligible for exemption or remission from duty, and the demand of duty was upheld.

Ratio Decidendi: Where excisable grey yarn is removed for processing, wastage occurring during a subsequent post-manufacturing process is not exempt from duty unless a specific statutory provision or notification grants such relief.

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