Cce Vs. Bharat Textile Mills

1. question involved in this appeal is whether the duty is to be charged at the sized weight of yarn. the lower appellate authority holding the duties to be charged on yarn before sizing has relied upon apex court's judgment in the case of j.k. spinning & weaving mills v.union of india 46. in the instant case, the appellants are liable to pay excise duty on the yarn which is obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics. although it has been alleged that the yarn is obtained at an intermediate stage of an integrated process of manufacture of fabrics, it appears to be not so. after the yarn is produced it is sized and, thereafter, subjected to a process of weaving the same into fabrics. be that as it may, as we have held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. in our view, the high court by the impugned judgment has rightly held that the appellants are not liable to pay any excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. no distinction can be made between unsized yarn and the sized yarn for the unsized yarn when converted into sized yarn does not lose its character as yarn.2. in view of the emphasised portion of the apex court's observation relied upon by the ld. lower authority, we do not find any substance in the appeal of the revenue. consequently, we dismiss the same.