SHREENIWAS COTTON MILLS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Facts and circumstances in these two petitions as also the dispute between the parties in these two petitions are in effect and substance virtually the same as the facts and circumstances in and the dispute which arose in Writ Petition No. 455 of 1980 decided by Kurdukar J. on July 14, 1981. I have already followed the said judgment - indeed, it binds me, there being no good reason to take a different view of the matter - while deciding at group of six other similar writ petitions, viz., (1) Writ Petition No. 434 of 1980, (2) Writ Petition No. 37 of 1979, (3) Writ Petition No. 281 of 1979, (4) Writ Petition No. 416 of 1979, (5) Writ Petition No. 678 of 1979 and (6) Writ Petition No. 108 of 1980.

(2.) However, in the present two petitions, one additional point is raised on behalf of the respondents and on the basis thereof, contention is that the decision of Kurdukar J. will not govern these two cases. Submission is, whereas before Kurdukar J. as also in the aforesaid group of petitions the yarn after sizing was consumed internally - a case of captive consumption - in these present petitions the yarn was after sizing sold outside. And this distinction, viz., sized yarn consumed internally as against sized yarn sold outside, is sought to be drawn for delinking these present two cases from the ratio of the judgment of Kurdukar J.

(3.) Hearing on this aspect the respective Counsels, I must say that the submission, ingenious though it be, seeks to draw a distinction without any difference to the fundamental question, viz. when is manufacture of yarn complete ? On this question, as I read the judgment of Kurdukar J., ratio is that the said manufacture is complete at the spindle stage. Consequently, whether the said completed yarn is later sized and used internally or is later sized and sold outside hardly matters. Indeed, it is extremely doubtful whether sizing could take place unless the yarn to be sized is actually manufactured. How can yarn not yet manufactured be at all sized ? Sizing would be neither a pre-manufacturing process nor an inherent part of the manufacturing process but, by its very nature, a process after manufacture or a post-manufacturing process. Indeed, in a given case, a manufactured yarn may not be sized at all. Sizing cannot, therefore, be said to be a process incidental or ancillary to manufacture. It is not a process constituting an essential ingredient of manufacture. It has nothing to do with manufacture as such. The manufacture of yarn is complete at the spindle stage or the spindle point when it emerges from the ring frame. And liability to pay excise duty thereon under Tariff Item No. 18E of the First Schedule to the Central Excises & Salt Act must, therefore, be determined accordingly, the weight of subsequent size or starch having no relevance in that behalf.