AURO SPINNING MILLS Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Auro Spinning Mills, is whether Central Excise duty is payable at single yarn stage or on double/multifold yarn.

(2.) Sh. Vishal Bansal, learned Advocate, submitted that the appellants manufacture cotton yarn and man -made yarn; that the present matter pertains to the period from 15.4.1994 to 31.12.1994 when they had paid Central Excise duty at single yarn stage in terms of Trade Notice No. 70 -CE/94 dated 7.6.1994 wherein "Off the Spindle Stage by the Commissioner of Central Excise, Chandigarh; that they were also using captively the single yarn for the purpose of doubling and multifolding, which was cleared by them without payment of duty under Notification No. 26/94 -CE dated 1.3.1994; that the Department has confirmed the duty on the ground that the duty has been short -paid as a result of payment of duty at single yarn stage and not at the stage of doubled or multifolded yarn. The learned Advocate, further, submitted that the duty is payable at single ply yarn stage only; that it has been held by the Appellate Tribunal in the case of Adinath Textiles Ltd. v. CCE that the duty is payable at the single yarn stage; that the Tribunal, has, further held that Notification No. 26/94, as amended by Notification No. 90/94 dated 25.4.1994, provides nil rate of duty in respect of doubled or multifolded yarn if manufactured out of yarn on which appropriate duty of excise has already been paid.

(3.) Countering the arguments, Mrs. Charul Barnwal, learned S.D.R., submitted that the single yarn at Spindal Stage is not marketable commodity; that as the single yarn is being consumed captively in the factory, it is only an intermediate product and there is no question of charging the duty at this tage. She has relied upon the decision of the Tribunal in the case of M/s. Oswal Woollen Mills Ltd. v. CCE 2000 (39) RLT 283, wherein it has been held that the duty liability on the manufacture of excisable goods has to be dis charged by the manufacturer at the time of removal of those goods as such from the factory premises, that since removal in terms of Rule 9 of Central Excise Rules does not take place when single yarn is taken for subjecting it through the process of doubling within the factory of production no duty would be payable at the single yarn stage and duty will be collected only at the time of removal of the resultant yarn in terms of Rule 9 of the Central Excise Rules.