Duty exemption for divergent assessment practice applied to correctly classified man-made fabrics under Chapter Heading 55.08.

Notifications Nos. 35/88 and 34/88 dated 21-12-1988 exempted the duty differential where goods had been assessed under one heading in prevailing practice though correctly classifiable under another. Man-made fabrics found not to contain cotton were held correctly classifiable under Chapter Heading 55.08, and the notifications applied because the short levy arose from divergent assessment practice during the relevant period. The appellate order granting the exemption was therefore upheld, and the departmental challenge failed.

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Issues: Whether man-made fabrics classifiable under Chapter Heading 55.08, and assessed during the relevant period under a different heading because of divergent practice, were entitled to the benefit of Notifications Nos. 35/88 and 34/88 dated 21-12-1988.

Analysis: The relevant notifications were issued to address situations where duty had been levied under one heading in practice, although the goods were liable under another heading. The goods in question were found not to contain cotton and were correctly classifiable under Chapter Heading 55.08. The notifications exempted the difference in duty where the basic excise duty and additional duty had been short levied during the stated period because of the prevailing practice of assessment under different headings. On that basis, the notification covered the assessee's case and no legal infirmity was found in the appellate order granting the benefit.

Conclusion: The assessee was entitled to the benefit of the notifications, and the departmental appeal failed.

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