S. Duggal, Member (J)

1. The proceedings in this case emanated from a notice to show cause bearing date 29-7-1976, having been issued by Superintendent, Central Excise, Chandernagore I Range (Annexure 'B') whereby the appellant company was called upon to show cause as to why central excise duty was not payable at all the three stages of manufacture of yarn, produced at their factory, namely, (i) cotton yarn (ii) staple yarn and (iii) the process of twisting or doubling these two yarns into a multiple fold yarn.

2. The facts, as revealed by the show cause notice, indicate that the appellant viz. a Company under name and style M/s. The General Industrial Society Limited (hereinafter referred to as the Appellant), manufactured separately cotton yarn of tariff item 18A, and staple yarn falling under Tariff entry 18, and used these two yarns as constituents, to produce a multiple-fold yarn, by the processing of doubling and twisting. During the period from October, 1975 to June, 1976, the appellant cleared this final product, by paying duty at the 3rd stage by treating it to be: "yarn, all sorts, not elsewhere specified", as contemplated by entry 18E of the Central Excise Tariff, as