Ordinary meaning of "yarn" excludes badh (baan), which was treated as an unclassified item under the notification.

Where a notification uses the word "yarn" without definition, it must be construed in its ordinary commercial and grammatical sense. On that basis, yarn is a spun strand primarily meant for weaving, knitting or rope-making. Applying that test, badh (baan), a finished product made from grass and used mainly for cots, did not satisfy the essential characteristics of yarn, even if it could be used in making cots and other articles. The later exemption notification for badh (baan) also supported the view that it was outside the yarn entry. It was therefore treated as an unclassified item rather than goods falling within the concessional yarn entry.

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Issues: Whether badh (baan) sold by the assessee falls within the expression "yarn of all kinds" under the relevant notification and is therefore taxable at 2 per cent, or whether it is an unclassified item taxable at the higher rate.

Analysis: The expression "yarn" was not defined in the Act, the Rules or the notification, so it had to be understood in its ordinary commercial and grammatical sense. On that basis, yarn must be a spun strand and must be primarily meant for use in weaving, knitting or rope-making. Applying that test, badh (baan) was found to be a finished product made from grass and used mainly for cots. Although it may be used in making cots and other articles, it was not primarily meant for weaving, and therefore did not satisfy the essential characteristics of yarn. The later exemption notification for badh (baan) reinforced the view that it was not covered by the entry relating to yarn.

Conclusion: Badh (baan) is not yarn within the meaning of the notification and does not fall under entry No. 55; it is taxable as an unclassified item. The revision succeeds, the Tribunal's order is set aside, and the assessment order is restored.

Final Conclusion: The goods were held outside the concessional yarn entry, so the higher unclassified tax treatment was upheld in favour of the Revenue.

Ratio Decidendi: Where a tariff or notification entry uses the word "yarn" without definition, it must be construed in its ordinary commercial sense, and the goods must satisfy both the spun-strand requirement and the requirement of being primarily meant for weaving, knitting or rope-making.

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