2001 (4) TMI 262

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....n. Appeals 4009 to 4014 are by Century Textiles & Industries Ltd. and others by Shyamprakash Spinning Mills Ltd. 2. Century Textiles spins cotton yarn. It has filed appeals against the orders of the Commissioner (Appeals) confirming the orders of the Assistant Commissioner that in computing the value of yarn captively consumed in weaving fabrics, it is the value of the sized yarn that has to be considered, and not the value of the yarn before sizing. The clearances took place between May 1995 and February 1996. 3. It is necessary to consider the history of judicial decisions relating to this aspect. The first of the decisions that we are concerned with is that of the Delhi High Court in J.K. Spinning & Weaving Mills - 1983 (....

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....32) E.L.T. 234] will apply. It would follow that sizing was not any "other process" referred in that note. 5. The reasons that the Commissioner (Appeals) advances is that sizing would be included in "any other process" mentioned in Note 2 to Chapter 52, after specifying various processes. The Tribunal has considered this aspect in Bombay Dyeing and Manufacturing v. C.C.E. - 2000 (120) E.L.T. 182, and it noted that the Board itself, in its order passed under Section 37B dated 27-3-1999 [reproduced in 1999 (114) E.L.T. T-50] had held that duty on yarn, which is sized before it is taken up for weaving in a composite mill will be leviable before sizing. It had noted that while the order itself would take effect only prospectively from i....

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....ntention of the representative of the appellant is that if it held that it is the unsized yarn that is liable to duty for captive consumption, it would follow that it is the same yarn which is liable to duty for home consumption. We have no quarrel with this proposition. In fact, the Bombay High Court in its judgement in Union of India v Swan Mills Ltd. - 1991 (56) E.L.T. 44 had considered the judgement of the Delhi High Court in J.K. Cotton and Spinning Mills v. Union of India and took the view that the sentence in paragraph 30 of the order that if sized yarn is cleared for home consumption, it would attract duty would be in the nature of obiter dicta not relevant in deciding the issue, and held that duty was leviable on the weight of the ....