Marketability of warped yarn determined excise liability, with no further duty sustained after prior duty on base yarn.

Warped yarn in beam form was treated as not marketable on the facts recorded, and the record also showed that central excise duty had already been paid on the base yarn before conversion into warp sheets. As the disputed period fell between Notification No. 35/95-C.E. and its amendment by Notification No. 84/95-C.E., the further duty demand at the warping stage could not be sustained. The assessee's position was therefore upheld, with no additional excise liability arising on the processed warp sheet in the circumstances examined.

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Issues: Whether warped yarn in the form of a beam, processed during the relevant period, was marketable and therefore liable to central excise duty despite duty having already been paid on the base yarn.

Analysis: The disputed period fell between Notification No. 35/95-C.E. dated 16-3-1995 and its amendment by Notification No. 84/95-C.E. dated 18-5-1995. The record showed that duty had already been paid on the yarn before it was converted into warp sheets, and the evidence relied upon by the adjudicating authority supported the finding that the warp sheet was not marketable. On that factual basis, the demand for further duty on the warping stage could not be sustained.

Conclusion: The duty demand on warped yarn was not leviable; the finding in favour of the assessee was upheld.

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