Exemption notification interpretation controls duty on mixed-fibre yarn; ordinary meaning of "partly" and prospective test reports applied.

Notification No. 133/77-CE exempted woollen and acrylic spun yarn falling under Item 18B(1), but yarn spun wholly or partly out of acrylic fibre remained chargeable to duty; the term "partly" was given its ordinary meaning and was not read as "predominantly". The proviso applied only where acrylic fibre had itself suffered the prescribed duty and did not extend to mixed-fibre yarn containing only a small acrylic content. A later test report could not retrospectively alter the duty position for an earlier period and operated only prospectively. The yarn therefore remained liable to duty at Rs. 10 per kilogram.

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Issues: Whether woollen and acrylic spun yarn containing a small percentage of acrylic fibre was entitled to exemption under Notification No. 133/77-CE, and whether a later test report could operate retrospectively to alter the duty liability for an earlier period.

Analysis: The notification exempted woollen and acrylic spun yarn falling under Item 18B(1) from duty, but expressly provided that yarn spun wholly or partly out of acrylic fibre would be liable to duty at Rs. 10 per kilogram. The term "partly" was held to bear its ordinary meaning and could not be read as "predominantly" merely because the tariff entry used that expression elsewhere. The proviso to the notification was also found inapplicable because it applied only where the yarn was spun from acrylic fibre on which the prescribed duty had been paid, and not to mixed fibre yarn where acrylic content was only a small part. The subsequent test report dated 28-1-1978 could not displace the earlier test results for the prior period, as the report could operate only prospectively and not retrospectively.

Conclusion: The yarn remained liable to duty at Rs. 10 per kilogram under Notification No. 133/77-CE, and the revision was rejected in favour of Revenue.

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