Judgment:
1. After hearing on the stay application for some time, it transpired, that the appeal itself could be disposed off, finally, on the short point of the lower authority's order conflicting to the findings therein. With the consent of both sides, and on waiving the pre-deposit of the amount, we take up the appeal for final decision.
2. The issue in this appeal is levy of duty, on waste arising during the process of yarn at ring frame, cone-winding, reeling, warping, sizing and pirn winding. This 'yarn waste' is cleared by the assessee without payment of duty and is liable for discharge of duty under Chapter 55.05. The lower authorities have considered the plea of the appellants and have rightly held that a new product falling under Chapter Heading 55.04 has emerged in the composite mill and duty on the same could not be avoided. They have also held that in case, any credit of input duty on yarn becomes due, the appellants would be entitled for the same on fulfilment and complying with the provision of law in this regard. However, the Commissioner (Appeals)' finding in paragraph 4 after observing the eligibility of credit reads as below:- "As such, I find no reason to interfere with the impugned order and reject the appeal as untenable under the law".
3. We find that the findings arrived at in paragraph 4 are in conflict with the earlier findings arrived at by the Id. Commissioner as regards the eligibility of credit. We, therefore, allow this appeal, directing that the appellants would be entitled to the credit on production of documentary evidence.