TaxTMI 
TaxTMI 
1981 (7) TMI 67
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....f the Central Excises and Salt Act, 1944 (hereinafter referred to as "the said Act") and the Central Excise Rules, 1944 (hereinafter referred to as "the said Rules") for the purposes of manufacturing, inter alia, blended yarn. It is also not disputed that the 1st Petitioner manufactures the said blended yarn, at its factory and textile mill situated at Parel, Bombay-400012. The aforesaid mill of the 1st Petitioner is a composite mill, i.e. engaged in spinning of yarn and weaving fabrics. 3. Some time in the year 1962, various textile mills in India started manufacturing blended yarn on experimental basis. Blended yarn means yarn which is made out of two or more fibres. The blending of such yarn is done in a textile mill by mixing the des....
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....ended yarn increases by 10 to 20 per cent. If the said sized yarn is washed the sizing material applied thereon is washed away but yarn even after the washing away of such sizing material remains yarn. 4. According to the petitioner some time in 1964, the 1st Respondent sought to subject the said blended yarn to excise duty under the then existing Tariff Item No. 18 which related to man-made fibres and yarn. The 1st Respondent accordingly issued a notification prescribing thereby various rates for such blended yarn, depending upon the content of non-cellulosic fibre i.e. polyester staple fibre within such blended yarn. This Tariff Item No. 18 was considered by the High Court of Judicature at Gujarat in Ahmedabad Calico Mills v. Union of ....
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....he provisions of Rule 173C of the said Rules and classified the yarn under Tariff Item No. 18E and the weight of the said yarn for the purposes of levy of excise duty was shown at spindle point, that is the point before the yarn was subjected to size. 6. It is then alleged by the petitioner that some time in the year 1976, it was learnt that a decision was taken at the highest level in the Excise Department to levy excise duty on the said yarn falling under Tariff Item No. 18E on the basis of its weight at the stage after the same was sized, that is at the stage of cones, bobbins and beams and not at the stage before it was sized. According to the petitioner on the basis of this decision, the respondent No. 4 addressed a letter dated Feb....
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....alf of the petitioners but I do not think that it is necessary to go into all these questions. This petition can be disposed of only on point namely, whether the excise duty is leviable on the yarn at its spindle point or at the stage of after sizing it under tariff Item No. 18E of the Act. The Government of India in Bharat Vijay Mill Ltd., vide its Order No. 1173 of 1980 has observed as follows :- "3. The applicants contest that the revision application should be decided on merits on the ground that the manufacture of yarn is complete at the spindle stage and the sizing which is done separately at the place of weaving. The yarn used for warp only is sized before it is used in the weaving department. 4. Government observe that the app....