2007 (5) TMI 178 - SC - Central Excise

CH 54.04 relates to artificial filament yarn whereas under CH Heading 54.06 relates to synthetic monofilament not exceeding 1 mm Monofilament & yarn are different product Impugned good is yarn & not filament & exceeds 1 mm so deserves to fall under 54.04 not under 54.06.

Summary

Issues:
Classification of monofilament yarn under Chapter Heading 54.04 or Chapter Heading 54.06.

Analysis:
The case involves the classification of a product under two different Chapter Headings, namely 54.04 and 54.06. The Department contended that the monofilament yarn should be classified under Chapter Heading 54.06, while the assessee argued it falls under Chapter Heading 54.04. The critical question was whether the product in question constituted synthetic monofilament of 60 deniers or more, as per Chapter Heading 54.06, or artificial filament yarn, as per Chapter Heading 54.04.

The Tribunal's decision relied on the conceptual difference between undrawn filaments, monofilaments, and filament yarn as discussed in a previous judgment. It was established that the process involves distinct stages: nylon chips in the first stage, monofilament in the second stage, and yarn in the third stage. Based on this conceptual understanding, it was determined that the product in question should be classified as artificial filament yarn under Chapter Heading 54.04, rather than synthetic monofilament under Chapter Heading 54.06.

Furthermore, the order highlighted that Chapter Heading 54.06 specifically refers to synthetic monofilament of 60 deniers or more, with no cross-sectional dimension exceeding 1 mm. The product under consideration, as evidenced by the machinery used by the assessee, exceeded the 1 mm dimension, indicating it did not fall under Chapter Heading 54.06. This distinction between monofilament and yarn was crucial in determining the appropriate classification for the product.

Ultimately, the Supreme Court found no error in the Tribunal's decision and dismissed the appeal, upholding the classification of the monofilament yarn under Chapter Heading 54.04. The judgment emphasized the importance of accurately interpreting the relevant Chapter Headings and distinguishing between different types of textile products based on their characteristics and dimensions.