Excise duty on single ply yarn attaches at manufacture, despite later doubling or multifolding for captive use.

Excise duty on single ply yarn attaches at the stage the yarn comes into existence as a fully manufactured excisable product, even if it is later doubled or multifolded for captive use in producing double or multifold yarn. Subsequent processing that does not create a new product does not shift the incidence of levy from the initial manufacturing stage. Earlier and later notifications affected only the permissibility of captive clearance during the relevant period and did not alter the statutory point of duty. The Tribunal was bound by Supreme Court authority on this principle, and the duty demand on single ply yarn for the disputed period was upheld.

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Issues: Whether excise duty on single ply yarn was payable at the stage of manufacture notwithstanding its later doubling or multifolding and captive consumption for manufacture of double or multifold yarn.

Analysis: The liability to excise duty was held to arise when the single ply yarn came into existence as a fully manufactured excisable product. Doubling or multifolding did not create a new product or shift the stage of levy. The earlier and later notifications only affected the permissibility of captive clearance during the relevant period, but they did not alter the principle that duty attached to the single ply yarn stage. Payment of duty at the later stage could not displace the statutory liability arising at the manufacturing stage, and the Tribunal was bound by the Supreme Court decisions on the point.

Conclusion: The demand of duty on single ply yarn for the disputed period was upheld and the appellant's challenge failed.

Final Conclusion: The appeal was rejected because excise duty was payable on single ply yarn at the stage of its manufacture, regardless of subsequent doubling or multifolding.

Ratio Decidendi: Where a product is fully manufactured and excisable at an initial stage, subsequent processing that does not bring into existence a new product does not shift the incidence of excise duty from that initial stage.

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