Per J.H. Joglekar:

The appellants were engaged in the activity of crimping/texturising of duty-paid man-made and synthetic yarn. They were manufacturing yarn commercially known as "Taspa yarn". At the material time, crimped textured yarn falling under chapter 54 was fully exempted provided the base yarn was duty-paid. In the years 1986, 1987 and 1988, the appellants had filed declarations claiming exemption from licensing control stating that the yarn manufactured by them was not leviable to further duty. The process of manufacture declared in all the three statements was identically worded and read as under :

"The filament or POY yarn is feeded to rotating shaft (Over feed or underfeed) at a constant tention with extra device (tention device) at a different speed. Either it is single end or two ends together into one spindle assembly into magnetic spinner. The yarn is heated into heater before it is going to spinner. This spinner is rotating in between two rollers of spindle assembly. In the spinner yarn is CIMPED. This gives crimp or other special visual effects depending upon the speed of the spinner. This spinner can also develop fancy yarn like slub crimped yarn, when two e