Exemption for jute yarn in bobbins denied where notification covered only straight reel hanks; pre-deposit waiver refused.

Jute single yarn cleared in bobbins was treated as marketable and was held outside the scope of Notification No. 26/95, which applied only to jute yarn supplied in plain straight reel hanks. On that basis, captive consumption of such bobbin yarn in the manufacture of multiple fold yarn did not justify exemption, and the alternative MODVAT credit claim under Notification No. 7/94-CE (NT) was not accepted on the stated facts. The appellant was therefore found not to have established a prima facie case for waiver of pre-deposit, and the full duty demand was directed to be deposited.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of duty demand on jute single yarn in bobbins captively consumed in the manufacture of multiple fold yarn, claiming exemption under Notification No. 26/95 dated 16.03.1995 and alternative MODVAT credit under Notification No. 7/94-CE (NT) dated 1.3.1994.

Analysis: The goods in question were single yarn in bobbins, which was treated as marketable. The exemption notification was held to apply only to jute yarn supplied in plain straight reel hanks, and not to yarn cleared in bobbin form. As the finished multiple fold yarn had been cleared without payment of duty, the claim of exemption for captive consumption was not accepted. On that basis, the appellant was found not to have established a prima facie case for waiver.

Conclusion: The request for waiver of pre-deposit was rejected and deposit of the entire duty demand was directed.

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