1992 (3) TMI 187

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.... heatset and untwisted simultaneously in one process. In this process of conversion of the partially oriented or fully oriented yarn into texturised yarn, waste is generated and the extent of waste varies between 1%-and 5% of the yarn to be texturised. The appellants received polyester filament yarn from M/s. Nirlon Synthetic Fibres and Chemicals Ltd. for the purpose of texturising and M/s. Nirlon had obtained permission in April 1981 under Rule 56B of the Central Excise Rules, 1944 to send polyester filament yarn to the appellants for this purpose. During the process of draw texturising of the polyester yarn received from Nirlon under Rule 56B, waste weighing 18182.24 kgs had been generated upto 31-3-1983, and the appellants brought this t....

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....aste which would arise in the process of draw texturising was to be dealt with and the demand for Rs. 12,30,377.11 was confirmed. The Collector (Appeals) by order dated 30-7-1985 held that Rule 56B did not lay down the rate of duty applicable on the goods cleared from the premises of another manufacturer to whom semi-finished goods were sent for processing and, therefore, the rate of duty in force on such goods cleared from the factory at the time of removal in terms of Rule 9, Central Excise Rules was to be applied i.e. duty should be paid on yarn if yarn was cleared, or on waste if waste was removed. According to the lower appellate authority it was to be determined whether the waste cleared by the appellants had any texturising feature o....