1986 (3) TMI 178 - AT - Central Excise

Summary

Issues Involved:
1. Classification of yarn blends under the Central Excise Tariff Schedule (CET).
2. Interpretation of "non-cellulosic fibre" in the context of acrylic fibre.
3. Applicability of previous High Court judgments to the current tariff structure.

Detailed Analysis:

1. Classification of Yarn Blends under CET:
The appellants manufactured three types of yarn blends containing varying proportions of viscose, wool, acrylic fibre, and polyester fibre. They claimed classification under Item 18III(i) of the CET, which pertains to cellulosic spun yarn containing not more than one-sixth by weight of non-cellulosic fibre. However, the Assistant Collector classified the goods under Item 18III(ii), CET, as the non-cellulosic fibre content exceeded one-sixth by weight. The appellate tribunal upheld this classification, concluding that the yarns fell under Item 18 III(ii).

2. Interpretation of "Non-Cellulosic Fibre":
The appellants argued that acrylic fibre should not be considered a non-cellulosic fibre for tariff purposes, citing Explanation III to Item 18 and previous interpretations by the Government of India and the Calcutta High Court. They contended that acrylic fibre was classed along with wool and not known in the market as a non-cellulosic fibre. The tribunal, however, found that technically and chemically, acrylic fibre is a non-cellulosic fibre. The tribunal noted that the tariff entries explicitly exclude acrylic fibre from being considered a non-cellulosic fibre only in specific contexts, such as Item 18E, but not in Item 18 III(i) and (ii).

3. Applicability of Previous High Court Judgments:
The appellants relied on the Calcutta High Court decision in Bengal National Textile Ltd. v. C.T.A. Pillai & Others and the Bombay High Court decision in Raymond Woollen Mills Ltd. v. C.T.A. Pillai & Others, which held that acrylic fibre could not be considered non-cellulosic. However, the tribunal noted that these judgments were rendered under the tariff structure before it was recast in 1977. The tribunal emphasized that a judgment rendered in the context of a particular tariff entry cannot be automatically applied to an altered tariff entry. The tribunal found internal evidence in the current tariff entries indicating when acrylic fibre should be considered non-cellulosic and when it should not.

Conclusion:
The tribunal concluded that the lower authorities were correct in classifying the three blends of yarn under Item 18 III(ii) and charging duty accordingly. The appeal was rejected, and the impugned order was upheld.