Judgment

HEGDE, J.: The only question for decision in this appeal by special leave is whether the coils of cotton yarn cleared out of the appellant s factory during the period from 17th August, 1962 to 14th November, 1962 are exempt from excise duty in view of Exts. P. 2 and P. 3 which exempt from payment of excise duty cotton yarn of 17 counts or more but less than 35 counts, if cleared out of factory in hanks .

2. The appellant is a company engaged in the manufacture and sale of cotton yarn. It has been manufacturing cotton yarn of varying counts ranging from 20 to 32. Under the provisions of the Central Excises and Salt Act, 1944, cotton yarn is liable to excise duty at the rate prescribed in the Sch. to the said Act. By section 13 (j) of the Finance Act, 1961 (Act XIV of 1961) all cotton yarns less than 35 counts were subject to excise duty at the rate of 10 Np. per Kg. This provision took effect from 1st March, 1961; but the Government by its notification dated 24th April, 1962 under rule 8 of the Central Excise Rules, 1944 granted exemption to the cotton yarn falling under item 18A of the 1st Sch. to the Act from so much of the duty leviable thereon as was in excess of the dut