2016 (6) TMI 668 - AT - Central Excise

Classification - goods manufactured by the appellant is single yarn with layers as the core falling under sub-heading no.5205.11 OR the goods falling under sub-heading 5205.90 - Held that - Examining the rival entries as well as the scope and intent of the entries, the Authority came to the conclusion that the claim of the sub-heading by the appellant as 5205.00, does not attract the goods manufactured by the appellant to its fold. Rather that attracts the sub heading 5205.11. Issue as above was before the Tribunal in the case of Arunachala Gounder Textile Mills (P) Ltd. Vs Commissioner of Central Excise, Salem (2010 (12) TMI 195 - CESTAT, CHENNAI ). The Tribunal making a thorough analysis of the process of manufacture as well as examining respective sub-headings held in favour of Revenue that the goods manufactured by appellant therein shall fail under the sub-heading 5205.11.

Summary

Issues: Determination of classification of goods under specific sub-headings in Central Excise Tariff Act, 1985 based on the manufacturing process and nature of the goods.

Analysis:

1. The primary issue in this appeal was to ascertain the correct classification of the goods manufactured by the appellant. The dispute revolved around whether the goods should be classified as single yarn with layers as the core under sub-heading no. 5205.11 or under sub-heading 5205.90 as claimed by the appellant. The learned Commissioner (Appeals) examined the manufacturing process as recorded in the appellate order to make this determination.

2. The manufacturing process involved in creating the goods was crucial in deciding the classification. The process of manufacturing core spun yarn was detailed, highlighting the modifications made to the ring spinning frame to incorporate Lycra filament spools. The process description emphasized the integration of Lycra filament with cotton roving to produce a single yarn with Lycra as the core, which was essential for classification under the appropriate sub-heading.

3. The Adjudicating authority thoroughly analyzed the process of manufacture, the character, nature, and properties of the goods to determine their classification under the Central Excise Tariff Act, 1985. By examining the intention behind the rival entries in the tariff, the authority concluded that the goods manufactured by the appellant aligned more closely with sub-heading 5205.11 rather than sub-heading 5205.90, based on the scope and intent of the entries.

4. The Tribunal referred to a previous case involving a similar issue of classification in Arunachala Gounder Textile Mills (P) Ltd. Vs Commissioner of Central Excise, Salem. In that case, the Tribunal had ruled in favor of the Revenue, classifying the goods under sub-heading 5205.11 after a detailed analysis of the manufacturing process and relevant sub-headings. The appellant's counsel mentioned that the decision was under consideration by the apex court in a Civil Appeal.

5. Considering the precedent set by the Tribunal's decision in the earlier case and the judicial discipline to follow established rulings, the Tribunal in the current appeal upheld the classification of the goods under sub-heading 5205.11. As the issue had already been decided by the Tribunal in a similar case, the bench dismissed all three appeals in alignment with the previous judgment.

This detailed analysis of the judgment highlights the key aspects considered in determining the classification of goods under specific sub-headings in the Central Excise Tariff Act, 1985, based on the manufacturing process and the nature of the goods involved.