1986 (9) TMI 283 - AT - Central Excise

Summary

Issues:
Classification of godet waste under Central Excise Tariff Schedule (CET) item 18, applicability of High Court judgments, relevance of nature of waste (cellulosic or non-cellulosic) in classification, comparison with other relevant judgments, and appropriate classification of the goods.

Analysis:
1. The case involves the classification of godet waste under the Central Excise Tariff Schedule (CET) item 18. The respondents, engaged in the manufacture of rayon yarn, contended that the waste collected at the godets did not qualify as rayon waste under item 18 of the CET. They relied on a Bombay High Court judgment that supported their argument.

2. The Appellate Collector of Central Excise allowed the respondents' appeal based on the High Court judgment, leading to the current appeal before the Appellate Tribunal. The Departmental Representative presented arguments, while the respondents did not appear but submitted their appeal before the Collector (appeals).

3. The Tribunal analyzed the Bombay High Court judgment in the Century Rayon case, which dealt with the classification of lower godet waste. The High Court had quashed the Assistant Collector's classification based on procedural grounds, without providing a definitive classification of the goods.

4. Another relevant judgment cited was the Bombay High Court decision in R.K. Synthetics and Fibres case, which classified non-cellulosic synthetic waste under a different item than cellulosic waste. The Tribunal found no contradiction between this judgment and the Century Rayon case.

5. The Departmental Representative argued that the nature of the waste (cellulosic or non-cellulosic) should impact the classification. However, the Tribunal disagreed, stating that the nature of the waste only affects the duty rate under specific notifications, not the classification itself.

6. The Tribunal distinguished a previous case involving broken glass excisability, emphasizing the specific issue of classifying lower godet waste under item 18, which covers man-made fiber and filament yarn.

7. Other Tribunal decisions cited by the Departmental Representative were found irrelevant to the current case, as they did not address the specific classification issue at hand.

8. The Tribunal referenced a case involving nylon and polyester filament yarn waste to highlight the commencement of yarn manufacturing at the extrusion stage. However, the Tribunal emphasized the relevance of the Bombay High Court judgment in classifying synthetic waste.

9. Ultimately, the Tribunal held that the godet waste in question was not classifiable under item 18 of the CET. Since the goods did not fit elsewhere in the tariff, they were classified under the residuary item 68, as claimed by the respondents, granting them relief.

10. The appeal was disposed of with directions to reclassify the goods under item 68.