S.C. Pratap, J.
1. Facts and circumstances in these two petitions as also the dispute between the parties in these two petitions are in effect and substance virtually the same as the facts and circumstances in and the dispute which arose in Writ Petition No. 455 of 1980 decided by Kurdukar J. on July 14, 1981. I have already followed the said judgment - indeed, it binds me, there being no good reason to take a different view of the matter - while deciding at group of six other similar writ petitions, viz., (1) Writ Petition No. 434 of 1980, (2) Writ Petition No. 37 of 1979, (3) Writ Petition No. 281 of 1979, (4) Writ Petition No. 416 of 1979, (5) Writ Petition No. 678 of 1979 and (6) Writ Petition No. 108 of 1980.
2. However, in the present two petitions, one additional point is raised on behalf of the respondents and on the basis thereof, contention is that the decision of Kurdukar J. will not govern these two cases. Submission is, whereas before Kurdukar J. as also in the aforesaid group of petitions the yarn after sizing was consumed internally - a case of captive consumption - in these present petitions the yarn was after sizing sold outside. And this distinction, viz., sized yarn consumed internally as against sized yarn sold outside, is sought to be drawn for delinking these present two cases from the ratio of the judgment of Kurdukar J.
3. Hearing on this aspect the respective Counsels, I must say that the submission, ingenious though it be, seeks to draw a distinction without any difference to the fundamental question, viz. when is manufacture of yarn complete On this question, as I read the judgment of Kurdukar J., ratio is that the said manufacture is complete at the spindle stage. Consequently, whether the said completed yarn is later sized and used internally or is later sized and sold outside hardly matters. Indeed, it is extremely doubtful whether sizing could take place unless the yarn to be sized is actually manufactured. How can yarn not yet manufactured be at all sized Sizing would be neither a pre-manufacturing process nor an inherent part of the manufacturing process but, by its very nature, a process after manufacture or a post-manufacturing process. Indeed, in a given case, a manufactured yarn may not be sized at all. Sizing cannot, therefore, be said to be a process incidental or ancillary to manufacture. It is not a process constituting an essential ingredient of manufacture. It has nothing to do with manufacture as such. The manufacture of yarn is complete at the spindle stage or the spindle point when it emerges from the ring frame. And liability to pay excise duty thereon under Tariff Item No. 18E of the First Schedule to the Central Excises & Salt Act must, therefore, be determined accordingly, the weight of subsequent size or starch having no relevance in that behalf.
4. Learned Counsel Mr. Mehta appearing for the respondents invited my attention to an unreported decision of the Delhi High Court in J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. Union of India, Civil Writ Petition No. 664 of 1979 decided on October 16, 1980 1981 E.L.T. 887 Going through the same, I do not find it decides this question. On the contrary, once held that manufacture is complete at the spindle stage then the following observations in the said judgment are inconsistent with the contention of the respondents herein :
'.......sizing is nothing more than the dipping of the yarn into a solution which imparts strength and facilitates the process of weaving. Sizing is merely a physical process and even the effect of this process is reversed when, after the process of weaving is complete, the sizing compound is completely washed off and the fabric is de-sized. It is, therefore, difficult to understand how the process of sizing on the yarn would render it a different commodity excisable in itself - a manufacturing process must impart a change to the commodity and result in the production or emergence of a new substance or commodity. Yarn before and after sizing is nothing but yarn and it is difficult to say that sized yarn is a commercial article which is different from the un-sized yarn.'
5. Learned Counsel, however, relied upon the following underlined part of the observation in the said judgment :
'........if excise duty were chargeable on yarn it would be chargeable at the stage when the yarn is wound on the cones and not at the stage of sizing unless it be that it is the sized yarn and not the yarn on the cones that is removed by the petitioner for the purpose of consumption or other manufacture.'
Now, this underlined portion is clearly an obiter dicta. It also does not flow or follow logically from the main judgment or even from the several observations preceding the same and which observations, as indicated, are inconsistent with the contention of the respondents herein. In the circumstances, it would not be possible to successfully invoke and apply the same to instant two petitions.
6. In the result, these petitions are allowed. Rule in each of these petitions is made absolute in terms of prayer clauses (a) and (d) of the respective petitions. In the circumstances of the case, however, the parties are directed to bear their own respective costs.
7. It is also directed that the Bank guarantee furnished by the respective petitioners in these two petitions pursuant to directions given by this Court on interim orders shall stand discharged after a period of four weeks from today and the same shall be returned to the respective petitioners.