Duty on single yarn arises at manufacture stage despite captive doubling; 0.35% wastage accepted for quantification.

Single yarn is treated as a manufactured product on which duty becomes payable at the single-yarn stage, even where it is cleared for captive use in doubling or multifolding. The later processing does not shift the point of levy, so captive consumption does not avoid duty at the stage of manufacture. For quantification, a 0.35% wastage allowance was accepted as a reasonable basis for working out the duty-liable quantity of yarn. The stated result was that duty liability at the single-yarn stage and the wastage percentage adopted for assessment were both sustained.

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Issues: (i) Whether duty was payable at the single yarn stage when the yarn was cleared for captive use in doubling. (ii) Whether the wastage percentage of single yarn at 0.35% was for determining the quantity liable to duty.

Issue (i): Whether duty was payable at the single yarn stage when the yarn was cleared for captive use in doubling.

Analysis: The appeal was covered by the Tribunal's earlier view that single ply yarn is a manufactured product and that subsequent doubling or multifolding does not alter the point at which duty becomes payable. On that reasoning, the liability arises at the stage of single yarn even where it is used captively for further processing.

Conclusion: The duty was payable at the single yarn stage and the finding was against the assessee.

Issue (ii): Whether the wastage percentage of single yarn at 0.35% was for determining the quantity liable to duty.

Analysis: The Tribunal had earlier accepted 0.35% as a reasonable wastage percentage for working out the weight of single yarn for duty purposes, and the same approach was applied here.

Conclusion: The wastage percentage of 0.35% was upheld and the finding was against the assessee.

Final Conclusion: The impugned order affirming duty liability at the single yarn stage and adopting 0.35% wastage was sustained, and the appeal failed.

Ratio Decidendi: Where single yarn is a manufactured product, captively used further for doubling, duty is exigible at the single yarn stage, and a reasonable wastage percentage may be adopted for quantification.

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