2013 (9) TMI 1005 - AT - Central Excise

Classification of goods - soft waste generated during the process of conversion of Polyester Tow to Polyester Tops - Held that - waste referred to under Headings 5503.11, 5503.12, 5503.19 and 5503.20 would apply only to waste arising in, or in relation to, the manufacture of man-made staple fibres. It is not in dispute that top, which is manufactured by the appellant in the factory for captive consumption is man-made fibres. In fact the raw fibre, tow and tops are of various forms of man-made staple fibres only. - Fair Child s Dictionary of Textiles dictionary describes Top as a bunch of fibre which have been straightened, parallelized and separated from short fibres by combing or made directly from the Tow . Therefore, Top is also a form of fibre and hence, waste arising while converting Tow into Top, is a waste arising in the process of manufacture of fibre and, therefore, the provisions of Note 3 of Chapter 55 is satisfied. - The process of conversion of Tow into Top covers waste arising during manufacture of staple fibres - Goods are covered under CETH 5503.19 - Decided against assessee.

Summary

Issues:
Classification of waste generated during the process of conversion of Polyester Tow to Polyester Tops under CETH 5503.19.

Analysis:
The appellant argued that the waste generated in the process of converting tow into tops is not excisable as they are not engaged in manufacturing man-made staple fibers through polymerization. They relied on previous tribunal decisions to support their contention.

The Revenue contended that polyester tow is a form of man-made fiber, and waste generated during the conversion process should be classified under CETH 5503.19. They referred to a previous decision where the classification was upheld by one member, while another member found the demand time-barred.

The tribunal analyzed Chapter 55.03, noting that it covers waste arising in the manufacture of man-made fibers and yarn. Chapter Note 3 clarified that waste under specific sub-headings applies to the manufacture of man-made staple fibers. The tribunal found that tops produced by the appellant are man-made fibers, supporting classification under CETH 5503.19.

The tribunal referenced Fair Child's Dictionary of Textiles, stating that tops are a form of fiber, and waste arising during the conversion process is considered waste in the manufacture of fiber. They dismissed the appellant's argument that they are not manufacturing man-made fibers, as the conversion process qualifies as manufacturing under the Central Excise Act, 1944.

The tribunal distinguished previous cases where waste arose in the manufacture of yarn, not staple fibers, and clarified that the waste in the present case falls under soft waste of staple fibers. They also found that a circular from the C.B.E. & C. supported the Revenue's classification under CETH 5503.19.

Since the demand was raised within the normal period, the tribunal concluded that the question of time-bar did not apply. Consequently, the tribunal dismissed the appeal, finding no merit in the appellant's arguments.