Strict compliance with exemption conditions governs processed cotton fabrics: daily clearance limits and machine-based bleaching restrictions apply.

Exemption for processed cotton fabrics under Notification No. 130/82-C.E., as amended, depended on strict compliance with the daily ceiling of 15,000 square metres of bleached cotton fabrics cleared in a financial year. The record showed admitted clearance beyond that limit on 25-12-1982, and unsupported contrary assertions could not overcome the admission. The notification also treated kiering as bleaching with the aid of machines, so bleaching done through kier machines fell within the disqualifying process. On these terms, entitlement to exemption failed on both the clearance-limit condition and the machine-based bleaching restriction.

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Issues: (i) Whether the appellants were entitled to exemption for processed cotton fabrics under Notification No. 130/82-C.E. as amended, despite the clearances on 25-12-1982 allegedly exceeding the daily limit of 15,000 square metres; and (ii) whether bleaching carried out with the aid of kier machines disentitled the appellants to the exemption.

Issue (i): Whether the appellants were entitled to exemption for processed cotton fabrics under Notification No. 130/82-C.E. as amended, despite the clearances on 25-12-1982 allegedly exceeding the daily limit of 15,000 square metres.

Analysis: The exemption under Notification No. 130/82-C.E., as amended by Notification No. 194/82-C.E., was subject to the condition that bleached cotton fabrics cleared on any day in the financial year should not exceed 15,000 square metres. The appellants' claim that only dyed fabrics were to be excluded from the count was rejected. The statement of the partner admitting clearance of 17,925 square metres of bleached cotton fabrics on 25-12-1982, coupled with the absence of supporting evidence for the contrary assertion, established breach of the daily ceiling.

Conclusion: The appellants were not entitled to exemption on this ground, and the finding of excess clearance was upheld against the assessee.

Issue (ii): Whether bleaching carried out with the aid of kier machines disentitled the appellants to the exemption.

Analysis: The amended notification expressly included kiering within bleaching with the aid of machines. The appellants failed to establish that the vessels used were outside that description, and the additional note sought to be relied upon was treated as inadmissible fresh evidence. On the admitted facts, the bleaching process fell within the disqualifying machinery-based process contemplated by the notification.

Conclusion: The appellants were not eligible for the exemption on this ground, and the finding against the assessee was affirmed.

Final Conclusion: The appeal failed because the appellants did not satisfy the exemption conditions under the relevant notifications, both on the daily clearance limit and on the use of kier-based bleaching.

Ratio Decidendi: Where an exemption notification prescribes strict conditions for daily clearance limits and excludes bleaching done with the aid of machines, entitlement depends on strict compliance with those conditions and unsupported contrary claims cannot defeat an admission or established record.

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