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Issues: Classification of product under Central Excise Tariff Act, wilful suppression by ZEB
In this case, the main issue revolves around the classification of the product under dispute, whether it falls under sub-heading 5406.19, 5404.00, or Chapter 39 of the Central Excise Tariff Act, 1985, and whether there was any wilful suppression on the part of ZEB. The appellants, who are manufacturers of monofilament, contested the classification by the Collector of Central Excise and Customs, Surat, who classified the product as synthetic monofilament yarn under sub-heading 5406.19 and demanded duty payment for the period in question. The central argument put forth by the appellants was that the goods should be classified under Chapter 39 as articles of plastics, specifically under Entry No. 39.26, and they should benefit from the exemption under Notification No. 53/86-C.E. The appellants claimed that the finished material they manufactured from Nylon-6 moulding powder was mainly used for making artificial hair and was marketed under the name "Atti." They emphasized that the material was not marketed as yarn, did not have yarn specifications, and was primarily intended for artificial hair and brushes, not textiles. The appellants cited legal precedents, such as Aditya Mills Ltd. v. Union of India and Sanghi Filaments Pvt. Ltd. v. Collector of C. Ex., Hyderabad, to support their argument that the goods in question did not meet the criteria to be classified as yarn. They highlighted the absence of a specific definition of 'yarn' in the Act or related regulations and relied on dictionary definitions to assert that the material they produced did not qualify as yarn. Ultimately, the Tribunal found that the case fell within the purview of a previous decision and ruled in favor of the appellants, setting aside the Collector's order and allowing the appeal. The judgment emphasized that the classification of the goods as yarn was incorrect based on the facts and circumstances presented in the case, aligning with the appellants' contentions and legal arguments.
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