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TMI Blog1987 (9) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... of challenge in the present appeal. 2. We have heard Smt. D. Saxena, Sr. D.R. for the appellant and Shri K.G. Sooji, Consultant for the respondents. 3. The appellant s contention, as set out in the grounds of appeal and elaborated by the Sr. D.R., is that the criterion of predominance of non-cellulosic fibre is relevant only for the purpose of classification of yarn under Item No. 18E of the First Schedule to the Central Excises and Salt Act, 1944 (CET, for short). Since Notification No. 332/77 grants exemption in terms to P.P. yarn, the predominance criterion is of no application in construing the notification as erroneously held by the Appellate Collector. The notification covers only 100% P.P. yarn. Further, it is contended that blended P.P. yarn is not known in the trade as P.P. yarn but as blended yarn. 4. The respondents contention, on the other hand, is that the notification does not require the yarn to be comprised wholly of polypropylene. P.P. is the predominant fibre in the subject yarn. Hence it is P.P. yarn. It is known as P.P. yarn in the trade. 5. We have carefully considered the submissions of both sides. There is no dispute about the classification of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n yarn (Item 18A), Item No. 18B (woollen and acrylic, spun yarn), Item 18C (silk yarn, all sorts), and Item No. 18D (jute yarn, all sorts), the descriptions are specific, it is not so in Item No. 18E for it would have been a virtually impossible task to set out specifically all the different types of non-cellulosic spun yarns. This difference in the terminology employed, should not, in our opinion, make any difference as to the interpretation of a specific non-cellulosic spun yarn falling under Item No. 18E, whether it is comprised wholly of a particular non-cellulosic fibre or that non-cellulosic fibre predominates in weight in that yarn. In this view of the matter, the expression polypropylene spun yarn would take in not only yarn comprised wholly of P.P. fibre, but also yarn in which P.P. fibre predominates in weight. Viewed from this angle, the impugned order is correct in extending the benefit of Notification No. 332/77, dated 1-12-1977 to the subject spun yarn in which P.P. fibre dominates in weight (52%). 10. In the result, the impugned order is upheld and this appeal is dismissed. 11. [Per : V.T. Raghavacharil. - I have read with care the order prepared by the Sr. Vic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the blended yarn in which polypropylene fibre predominates was or was not entitled to benefit under Central Excise Notification No. 322/77-C.E., dated 1-12-1977. [Order per : S. Venkatesan, President]. - The point of difference between the learned Senior Vice-President and the learned Judicial Member, who originally heard this case, is the following :- Whether the blended yarn in which polypropylene fibre predominates was or was not entitled to benefit under Central Excise Notification No. 322/77-C.E., dated 1-12-1977. 2. The facts are quite simple. The goods in this case are polypropylene spun yarn, containing 52% propylene and 48% viscose. Admittedly it falls within Item 18E, relating to non-cellulosic spun yarn of which the description runs as follows :- Spun (discontinuous) yarn, in which man-made fibres of non-cellulosic origin, other than acrylic fibre, predominate in weight..... . The respondents are claiming the benefit of the exemption under Notification No. 322/77-C.E., dated 1-12-1977. This notification exempts polypropylene spun yarn falling under Item 18E . 3. The question for decision is whether the criterion of predominance in weight con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in weight as in the tariff heading should be applied. Shri Sooji added that the benefit of the exemption had been granted in respect of such yarn in the Chandigarh and Baroda Collectorates. A different view should not be taken with reference to a factory in the Jaipur Collectorate. 9. Shri Sooji cited the decision of the Hon ble Allahabad High Court in the case of Geep Flashlight Industries Ltd. [1979 (4) E.L.T. (J. 391)]. In that case the Hon ble High Court had observed that in a taxing statute if two interpretations of its charging provision are reasonably possible, it is well settled that the construction favourable to the subjects should be preferred. In the present case two interpretations were obviously possible, since there was a difference of opinion even as between the Members, of the original Bench. Accordingly, the interpretation which was in favour of the assessee, namely the respondents, should be preferred. 10. Shri Sooji also faintly argued that the polypropylene blended spun yarn in question was known in the trade as polypropylene spun yarn. His attention was drawn to para 8 of the order of the learned Senior Vice-President. It has been recorded therein that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly yarn containing 100% polypropylene as eligible for duty exemption. Equally, it was entirely permissible for Government to extend the notification to yarn in which polypropylene fibre predominated in weight. In order to decide what was the intention of Government, one has to go by the accepted canons of interpretation. 15. The basic question is whether the criterion incorporated in the tariff item should be deemed to be applicable to the notification. It appears to me that there is force in the submission of Smt. Saxena that the notification should be construed according to its plain meaning. As was pointed out to Shri Sooji, it is well established that, whereas the burden is on the revenue authorities to bring the article to be taxed within the scope of the tariff item, the burden is on the person claiming exemption to show that it is entitled to the exemption. It has also been held that exemption notification should be strictly construed. In the light of these principles it is difficult to avoid the conclusion that the expression polypropylene spun yarn , without any qualification, appearing in the notification should be deemed to cover only yarn containing 100% polypropylen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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