Collector Of Central Excise, Hyderabad vs Divya Enterprises Ltd.

The Supreme Court held that Notification No. 65 of 1987 does not exempt terry-towelling fabric from duty, as it only exempts towels. The Court set aside the Tribunal's interpretation, affirming that duty must be paid on the fabric under Heading '5802.12'. The Court directed that the respondent is entitled to an adjustment for duty paid on towels, with provisions for refund or additional payment based on the final duty calculation. The order is applicable only for the duration of the notification.