Excise duty on hard waste from yarn doubling upheld where yarn became excisable at the single ply stage.

Hard waste generated during the doubling or multi-folding of single ply yarn was treated as liable to excise duty because the yarn had already become an excisable commodity when it first emerged on the spindle in single ply form. The duty collection was regarded as deferred rather than avoided, and no material distinction was accepted between clearance at the single ply stage and clearance after further processing for the purpose of taxing the resulting waste. On that reasoning, duty on the hard waste was upheld.

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Issues: Whether hard waste generated in the process of doubling or multi-folding single ply yarn was liable to excise duty.

Analysis: The yarn was held to become excisable when it first appeared on the spindle in single ply form, and the collection of duty was only deferred. Waste generated after that stage was treated as arising from an excisable commodity. No material distinction was accepted between clearance at the single ply stage and clearance after doubling or multi-folding for the purpose of duty on the hard waste.

Conclusion: Duty was payable on the hard waste generated in the process of doubling or multi-folding of the yarn.

Final Conclusion: The appeals failed and the demand of duty on the hard waste was upheld.

Ratio Decidendi: Waste generated after a yarn has become excisable at the stage when it first emerges in single ply form is liable to duty, even if collection of duty is deferred.

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