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Interpretation of Notification No. 27/75 under the Central Excises and Salt Act, 1944 regarding exemption for hand-knitting yarn manufactured by a limited company. Determination of whether the hand-knitting yarn qualifies as bulked yarn under Item No. 18 of the First Schedule to the Central Excise Act. Analysis: The petitioners, a limited company engaged in manufacturing woollen yarn, challenged the authorities' view under Article 226 of the Constitution regarding the exemption of hand-knitting yarn from excise duty as per Notification No. 27/75. The notification exempted various types of yarn spun out of synthetic staple fibers falling under Item No. 18(1) of the First Schedule. The authorities contended that the hand-knitting yarn manufactured by the petitioners did not fall under Item No. 18(i) of the Act, which was a prerequisite for the exemption (Para 1-2). The dispute centered around whether the hand-knitting yarn was considered textured yarn or bulked yarn under Item No. 18. The authorities determined that the yarn was bulked yarn due to a specific process, thereby disqualifying it from the exemption. The petitioners argued that unless the yarn was processed to introduce crimps, coils, loops, or curls, it should not be classified as bulked yarn as per Explanation 2 to Item No. 18 (Para 3-4). The court analyzed the interpretation of statutes and the definition of textured yarn under Item No. 18. It concluded that if the hand-knitting yarn became bulked yarn through a particular process, it should be considered textured yarn, rendering it ineligible for the exemption. The court rejected the petitioners' argument that specific processing was required to classify yarn as bulked yarn (Para 5). The court referenced a previous order by the Appellate Collector and a judgment by the Customs, Excise, and Gold (Control) Appellate Tribunal to support the authorities' classification of the yarn as bulked yarn. The court highlighted that the petitioners' own description of the manufacturing process confirmed the yarn's bulked nature, leading to the dismissal of the petition (Para 6-8). Ultimately, the court upheld the authorities' findings and dismissed the petition, emphasizing that no error was evident in the decision. The court discharged the rule with no order as to costs, concluding the judgment (Para 9).
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