Conditional yarn exemption denied where doubled yarn was not used in fabric manufacture and cumulative notification requirements were unmet.

Exemption under Notification No. 35/95-C.E. for doubling of single yarn on job work basis was available only if two cumulative conditions were satisfied: the yarn had to be intended for use in the manufacture of fabrics, and it had to be made from yarn falling within the specified chapters on which appropriate duty had already been paid. Because the double yarn was not used in the manufacture of fabrics, the essential requirement for the notification was not met, and the benefit of the exemption was denied.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 35/95-C.E. dated 16-3-95 for doubling of single yarn carried out on job work basis.

Analysis: The exemption under the notification was subject to two conditions, namely, that the yarn should be meant for use in the manufacture of fabrics and that it should be manufactured out of yarn falling within the specified chapters on which appropriate duty had already been paid. These conditions were cumulative and had to be read together. Since the assessee did not use the double yarn in the manufacture of fabrics, the essential requirement for availing the exemption was not satisfied.

Conclusion: The assessee was not entitled to the benefit of the notification.

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