1986 (4) TMI 223 - AT - Central Excise

Summary

Issues Involved:
1. Levy of additional duty under item 22(3) of the Central Excise Tariff (CET).
2. Applicability of additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.
3. Rate of additional duty on nylon yarn content under the Additional Duty Rules, 1966.

Detailed Analysis:

1. Levy of Additional Duty under Item 22(3) of CET:
- Background: Goodyear imported a consignment described as "Bulked Nylon Fabric" and paid the assessed duty. They later claimed a refund, arguing that the additional duty was incorrectly levied.
- Appellate Collector's Findings: The fabric was unprocessed, woven from nylon yarn treated with artificial resins, and thus exempt from certain excise duties.
- Central Government's View: The goods were processed fabrics and should attract additional duty at 30% ad valorem + 1.5% ad valorem.
- Tribunal's Decision: The Appellate Collector's interpretation of the fabric as unprocessed was upheld. The chemical examiner's report supported that the fabric was woven from treated yarn, not coated or impregnated. Thus, the imported goods did not attract additional duty under item 22(3) of CET.

2. Applicability of Additional Duty under the 1957 Act:
- Revenue's Argument: The goods were processed fabrics, attracting duty at 5.5% ad valorem under the 1957 Act.
- Goodyear's Argument: The base fabric was unprocessed and exempt from such duty under Notification No. 109/75-C.E.
- Tribunal's Decision: The base fabric being unprocessed, as admitted in the show cause notice, was exempt under Notification No. 109/75-C.E. Therefore, the imported goods did not attract additional duty under the 1957 Act.

3. Rate of Additional Duty on Nylon Yarn Content:
- Revenue's Argument: The nylon yarn was bulked yarn, attracting duty at Rs. 24.60 per kg under Notification No. 55/78.
- Goodyear's Argument: The yarn should attract duty at Rs. 6.50 per kg under Notification No. 28/75, as it was above 750 deniers.
- Tribunal's Decision: Bulked yarn is considered textured yarn, which falls under item 18(ii) of CET. The applicable rate was Rs. 24.60 per kg as per Notification No. 55/78. The Tribunal did not accept Goodyear's contention that the yarn was merely textured out of base yarn.

Conclusion:
1. The imported goods did not attract additional duty of customs corresponding to the excise duty under item 22(3) of CET.
2. The goods did not attract additional duty of customs corresponding to the excise duty under the 1957 Act.
3. The nylon yarn content attracted additional duty at Rs. 24.60 per kg.
4. Special excise duty as applicable was also leviable.

Final Order:
The impugned order was modified to reflect these findings, and the appeal was disposed of accordingly.