- (1.) HEARD learned counsel for the applicant as well as learned counsel for the respondent on caveat.
(2.) THIS is an application under Section 35H(1) of the Central Excise Act, 1944. The facts leading to this application are that the yarn manufactured by the assessee passes through two stages. In the first instance single yarn is manufactured and by using that single yarn to further process it is converted into double yarn. The respondent -assessee has paid duty on double yarn. The case of the revenue is that the double yarn is not a dutiable item but duty was to be paid on single yarn and therefore on the entire manufactured quantity of single yarn duty was payable by the assessee and he cannot escape the liability of paying duty by paying the duty on subsequent item which was not taxable. The Additional Commissioner of Excise, after initiating proceedings under Section 11A held that that 11,108 kgs single yarn manufactured by the assessee has not been subject to assessment of duty and accordingly assessed Rs. 2,55,484/ - as duty on yarn contained in the form of waste arising during the process of doubling/multi -folding. He was of the opinion that it is on the weight of single yarn alone on the basis of which duty is leviable. He did not accept the plea of the assessee that since the assessee has already paid duty at doubling stage on the double yarn at a higher valuation, therefore, no duty is now payable on the single yarn.
(3.) ON appeal, the Commissioner (Appeals) held that taking the waste percentage as .35% the demand would be worked out afresh on the quantity of single yarn used for doubling during the relevant period. He also noticed that the appellant -assessee has claimed the quantity of waste at 4,331 and 1,877 kgs respectively in Appeals No. 331/VII1/99 and 262/VI/99. With these findings, he remanded the Appeals No. 331 and 262 to work out the excise duty liability afresh. However, he affirmed the demand in the case of Appeal No. 222/111/98 by finding that the demand has been raised taking into account the waste at .35% only and affirmed the determination made by the appellate authority.;