Artificial fibre classification under tariff rules prevented denial of exemption for viscose fibre used in yarn manufacture.

Viscose fibre used in yarn manufacture was treated as artificial fibre, not synthetic fibre, because the tariff scheme drew separate distinctions between man-made, synthetic and artificial fibres. The mere fact that viscose is man-made did not place it within the disqualifying expression in Notification No. 5/99. On that basis, the exemption could not be denied on the ground of synthetic fibre, the Revenue's challenge failed, and the order in favour of the assessee was left undisturbed.

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Issues: Whether viscose fibre used in the manufacture of yarn could be treated as "synthetic fibre" so as to deny the benefit of Notification No. 5/99.

Analysis: The applicable tariff note drew separate distinctions between man-made, synthetic, and artificial fibres. Viscose fibre was found to fall within the category of artificial fibre and not synthetic fibre. The mere fact that viscose is a man-made fibre did not justify its treatment as synthetic fibre, and no basis was shown to bring it within the disqualifying expression used in the notification.

Conclusion: The benefit of Notification No. 5/99 was not available on the ground of synthetic fibre, and the challenge by the Revenue failed.

Final Conclusion: The appeals were rejected and the order in favour of the assessee was left undisturbed.

Ratio Decidendi: Where a tariff scheme makes distinct classifications between synthetic and artificial fibres, a fibre falling within the artificial category cannot be treated as synthetic merely because it is man-made for the purpose of denying an exemption tied to the absence of synthetic fibre.

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