1985 (3) TMI 257

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....es cotton yarn falling under Item No. 18A (1) of the First Schedule to the Act. The yarn so manufactured is utilised in the manufacture of fabrics. At times, the yarn is cleared, as such, on payment of duty; (b) yarn in the form of tangled waste was cleared in the month of April, 1978 under Gate Passes Nos. 308, 309 and 326; (c) on 25-5-1978, a notice was issued requiring the Appellant to show cause to the Assistant Collector as to why duty in a sum of Rs. 2,569.63 should not bs recovered under rule 10(1 )(a) of the Central Excise Rules, 1944. As would appear from the particulars appended to the notice, the demand for payment of duty was in relation to waste cotton yarn in tangled form on the basis of duty leviable on the highest coun....

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...., were, therefore, rendered illegal and could not have been confirmed by the Appellate Collector; (ii) the exemption for waste cotton yarn falling within Notification No. 95/61-CE dated 1-4-1961 had been specifically claimed in the Classification List dated 4-3-1978 and approved also; (iii) in terms of the aforesaid Notification, the stage at which the waste cotton yarn should result, so as to be eligible to the benefit of the exemption contained therein, had not been specified. It was, therefore, incorrect to say that the waste should have arisen at the spindle point before the cotton yarn was sent for sizing; (iv) in any view, the count of the yarn cleared under the aforesaid Gate Passes was never 34s. It was either 26s or 14s. T....