1981 (1) TMI 75 - CGOVT - Central Excise

Summary

Issues:
1. Classification of acrylic hand-knitting bulked yarn under Central Excise Tariff.
2. Applicability of concessional effective rates of duty under Notification No. 27/75.
3. Possibility of double levy of duty on the same commodity.
4. Interpretation of Tariff Item 18 Central Excise Tariff regarding bulked yarn.
5. Impact of changes in the tariff structure on classification.
6. Claim regarding the use of power in the manufacturing process.

Analysis:
The central issue in this case revolves around the classification of acrylic hand-knitting bulked yarn under the Central Excise Tariff. The petitioners argue that the yarn should be classified under sub-item (i) of Item 18 as "fibres and yarn other than textured yarn," rather than under sub-item (ii) as held by the lower authorities. They contend that the process of giving bulk to the yarn through steaming and dyeing does not qualify as bulking, and the yarn should not be considered as textured yarn, which would lead to double levy of duty on the same commodity.

The petitioners also rely on Notification No. 27/75, claiming that the concessional rates of duty mentioned therein should apply to the yarn they produce. However, the government, after considering all submissions and examining records, finds that the process undertaken by the petitioners does indeed make the yarn noticeably bulkier, meeting the definition of bulked yarn as per authoritative sources. The government concludes that bulked yarn can be produced from staple yarn through hot or wet processing, supporting the classification under Item 18(ii) of the Central Excise Tariff.

Regarding the interpretation of Tariff Item 18, the government clarifies that bulked yarn falls under the category of textured yarn as per Explanations I and II, covering both continuous filament yarn and spun discontinuous yarn. The government rejects the petitioners' reliance on Notification 27/75, stating that it does not apply to yarn classified under sub-item (i) of Item 18. Additionally, the government dismisses the argument of double levy of duty, affirming that duty is leviable on textured yarn produced from base yarn under sub-item (ii) of Tariff Item 18.

The government emphasizes that the classification of excisable goods must be based on the tariff description applicable at the relevant time, disregarding subsequent changes in the tariff structure. Lastly, the government rejects the petitioners' belated plea regarding the use of power in manufacturing, stating that such claims should have been raised earlier in the process. The government finds no merit in the revision application and rejects it, advising the petitioners to address any new claims before the assessing officer.