Judgment 1. Heard learned Counsel for the applicant as well as learned Counsel for the respondent on caveat. 2. This is an application under Section 35H(1) of the Central Excise Act, 1944. The facts leading to this application are that the yarn manufactured by the assessee passes through two stages. In the first instance single yam is manufactured and by using that single yarn to further process it is converted into double yam. The respondent-assessee has paid duty on double yam. The case of the revenue is that the double yarn is not a dutiable item but duty was to be paid on single yarn and therefore on the entire manufactured quantity of single yarn duty was payable by the assessee and he cannot escape the liability of paying duty by paying the duty on subsequent item which was not taxable. 3. TheAdditional Commissioner of Excise, after initiating proceedings under Section hA held that that 11,108 kgs single yarn manufactured by the assessee has not been subject to assessment of duty and accordingly assessed Rs. 2,55,484/-as duty on yam contained in the form of waste arising during the process of doubling/multi-folding. He was of the opinion that it is on the weight of single yarn alone on the basis of which duty is leviable. He did not accept the plea of the assessee that since the assessee has already paid duty at doubling stage on the double yarn at a higher valuation, therefore, no duty is now payable on the single yarn. 4. On appeal, the Commissioner (Appeals) held that taking the waste percentage as .35% the demand would be worked out afresh on the quantity of single yarn used for doubling during the relevant period. He also noticed that the appellant-assessee has claimed the quantity of waste at 4,331 and 1,877 kgs respectively in Appeals No. 331/VII1/99 and 262/VI/99. With these findings, he remanded the Appeals No. 331 and 262 to work out the excise duty liability afresh. However, he affirmed the demand in the case of Appeal No. 222/111/98 by finding that the demand has been raised taking into account the waste at .35% only and affirmed the determination made by the appellate authority. 5. Dissatisfied with the order passed by the Commissioner (Appeals), revenue preferred appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (CEGAT). 5. Dissatisfied with the order passed by the Commissioner (Appeals), revenue preferred appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (CEGAT). CEGAT by its order dated 11-1-2001 held the proposition in principle as advanced by the revenue that the demand of central excise duty should be based on the actual quantity of production and clearance and not on hypothetical quantity by deriving the same on a hypothetical formula. With this conclusion, the Tribunal remanded the case back to the Assessing Authority to decide the case afresh as it was necessary to establish the duty correctly payable on the single yam actually produced by the appellant. In doing so, the Tribunal also accepted the plea of the assessee that since no tax was payable on double yarn and the assessee has already paid the tax on double yarn which in fact was payable at the earlier stage of the manufacture of single yarn, the amount paid by the assessee at the later stage ought to be adjusted against the duty so determined afresh by quantifying the amount of duty at the correct stage of the manufacture of single yarn. 6. It is in the aforesaid facts and circumstances, the revenue has filed this application seeking a reference on the following questions said to be arising out of the Tribunal’s order. “(I) Is it permissible under Central Excise Act and Rules made thereunder to adjust duty paid on subsequent or final product on duty payable on the intermediate product, more so, when subsequent/final products is not leviable to duty and the intermediate product has been held excisable and dutiable? (II) Theduty on double yarn was, in fact, duty paid on the single yarn with value addition as laid down by the Hon’ble Supreme Court in the case ot Sidhartha Tubes Ltd. vs. CCE [ 2000 (115) E.L.T. 32 (S.C.)]. Thus, single yarn contained in the waste arisen in the process of conversion from single yarn to double yarn had escaped duty. The condition imposed by the CEGAT for recovery of duty on waste, i.e. the duty paid double yarn should be less than duty payable on single yarn with adjustment is unwarranted and needs to be quashed.” 7. Fromthe narration of facts, it is apparent, the aforesaid two questions simply do not arise out of the Tribunal’s order on the undisputed facts. Fromthe narration of facts, it is apparent, the aforesaid two questions simply do not arise out of the Tribunal’s order on the undisputed facts. There is no dispute about the fact that the assessee is manufacturing the single yarn and using that single yarn in the manufacture of double yam, therefore, the question really which was in dispute before the revenue authorities was to determine the correct duty at the right stage and not which of the amount is liable to be taxed. Whatever amount the assessee had paid towards that Excise Duty payable by him in respect of a commodity manufactured by him is undoubtedly is liable to be adjusted against the final liability. In granting this adjustment, no question of giving the reverse adjustment of the duty is sought to be contended by the revenue. It is not a question of granting Modvat credit at earlier or later stage but a question of determination of duty payable by adjustment of payment already made by redetermination at correct stage. 8. Accordingly this reference fails and is hereby dismissed. No orders as to costs.