Exemption for cotton yarn in straight reel hanks applied, leaving no duty liability for the disputed period.

Multi-fold cotton yarn in straight reel hanks was treated as falling under Chapter Heading 52.03, and Notification No. 31/93 dated 28-02-1993 was applied as the governing exemption after superseding Notification No. 53/91-C.E. dated 25-07-1991. The notification prescribed nil duty for cotton yarn under the relevant heading, and the settled position noted was that cotton yarn in straight reel hanks did not attract duty under the exemption. On that basis, the goods were held not liable to duty for the disputed period and the demand was unsustainable.

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Issues: Whether multi-fold cotton yarn in straight reel hanks was liable to duty during the disputed period in view of Notification No. 31/93 dated 28-02-1993.

Analysis: The goods were accepted to fall under Chapter Heading 52.03. Notification No. 31/93 dated 28-02-1993 superseded Notification No. 53/91-C.E. dated 25-07-1991 and prescribed nil duty on cotton yarn falling under the relevant heading. The Tribunal also noted the settled position that cotton yarn in straight reel hanks did not attract duty in view of the exemption notification.

Conclusion: The goods were not liable to duty for the period in dispute and the demand could not be sustained.

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