Exemption for captive consumption under Notification No. 118/75 applied once yarn was classified under Tariff Item 68.

Once polyester/viscose/acrylic yarn was accepted as falling under Tariff Item 68, the authorities were required to consider the assessee's claim for exemption under Notification No. 118/75 in terms of the remand direction. The settled classification could not be used to avoid the exemption question, and captive consumption brought the goods within the notification's scope. The assessee was therefore entitled to the benefit of Notification No. 118/75.

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Issues: Whether, after the Tribunal had held the goods to fall under Tariff Item 68, the assessee was entitled to the benefit of Notification No. 118/75 for goods captively consumed.

Analysis: The classification of the polyester/viscose/acrylic yarn under Tariff Item 68 had already been settled. In such circumstances, the authorities were bound to examine the assessee's claim for exemption under Notification No. 118/75 in accordance with the remand direction and could not ignore the very question they were required to decide. Once the goods were accepted as falling under Tariff Item 68, and captive consumption was shown, the notification was applicable.

Conclusion: The assessee was entitled to the benefit of Notification No. 118/75.

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