WESTERN INDIA TEXTURIZERS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The short question, which arises for consideration in these two writ petitions is as to whether processing of twisting and doubling of the yarn would amount to manufacture, so as to attract payment of excise duty in terms of the provisions of Central Excise and Salt Act, 1944 ( hereinafter referred to as 'the said Act'). The petitioner herein is engaged in the business of processing of nylon yarn on job basis, i.e., it processes yarn of the other parties and is paid for the work done. For the said purpose, it receives nylon yarn from various parties. It twists / doubles nylon yarn on special machine wherefor the same does not undergo any physical or chemical changes, nor does it lose its original characteristics. According to the petitioner, twisted and doubled yarn continues to be known as yarn and is covered by TI 18 (i) (a) of the I Schedule to the said Act.

(2.) . Central Board of Excise 8s Customs ( hereinafter referred to as 'the Board' ) issued notification bearing No. 24/77, which is in the following terms :

(3.) . Subsequent to the aforesaid notification, the Excise Authorities initiated proceedings against the petitioner for recovery of excise duty whereupon the petitioner informed the Assistant Collector, Central Excise vide its letter dated 26.02.1981 that it intends to process fish net yarn at its factory at Ahemdabad and does not agree with their view for making payment of excise duty @ 8%. However, the said duty was paid under protest.