Blended yarn was not dutiable under earlier tariff entries before a specific entry was introduced for it.

Blended yarn of wool and staple fibre of cellulosic or non-cellulosic origin, with wool content below 40%, was not liable to central excise duty under Item 18 or 18A of the Central Excise Tariff Schedule for the relevant period. The classification could not be sustained on a predominant fibre test where the statute did not provide for it, and blended yarn was treated as brought within excisable coverage only when Item 18-E was specifically introduced. The duty demand was therefore unsustainable, and the assessee obtained consequential relief.

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Issues: Whether blended yarn consisting of wool and staple fibre of cellulosic or non-cellulosic origin, with wool content below 40%, was liable to central excise duty under Item No. 18 of the Central Excise Tariff Schedule before the introduction of Item No. 18-E.

Analysis: The dispute turned on tariff classification of blended yarn during the relevant period. The reasoning accepted that blended yarn was brought within excisable coverage only when Item No. 18-E was introduced to specifically cover blended yarn. Prior to that introduction, levy on such blended yarn under Item No. 18 or Item No. 18A had been held to be without authority of law. The exclusion of the predominant weight test also supported the conclusion that classification could not be sustained merely by reference to the dominant fibre content.

Conclusion: The blended yarn in question was not liable to excise duty during the material time, and the demand could not be sustained.

Final Conclusion: The appeal succeeded and the assessee obtained the consequential relief flowing from the setting aside of the duty demand.

Ratio Decidendi: Blended yarn was not dutiable under the earlier tariff entries until a specific entry was introduced for it, and tariff classification could not be sustained on a predominant fibre test where the statute did not so provide.

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