Strict construction of exemption notification bars yarn with only predominant glass fibre content from claiming glass-fibre exemption.

Yarn containing 85.6% glass fibre and coated with organic compound was held not to qualify as yarn spun wholly out of glass fibres for exemption under Notification No. 52/86-C.E. The expression "wholly" was construed strictly to mean complete composition of glass fibres, not merely predominant or main composition, and the notification also excluded continuous filament yarn. On that basis, the refund claim failed and the rejection of exemption was upheld.

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Issues: Whether yarn containing 85.6% glass fibre and coated with organic compound could be treated as yarn spun wholly out of glass fibres for the purpose of exemption under Notification No. 52/86-C.E.

Analysis: The sample was found to be double ply spun yarn made mainly of glass fibre and coated with organic compound, with glass fibre content of 85.6%. The exemption entry covered only yarn spun wholly out of glass fibres, excluding continuous filament yarn. The expression "wholly" was held to require complete composition of glass fibres and could not be read as "mainly". Exemption notifications were required to be construed strictly.

Conclusion: The yarn did not satisfy the requirement of being wholly made of glass fibres and was not eligible for exemption under Notification No. 52/86-C.E.; the Assistant Collector's rejection of the refund claim was upheld.

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