1987 (8) TMI 199 - AT - Central Excise

Summary

Issues:
- Classification of nylon twine under Central Excise Tariff
- Whether twisting of yarn into twine alters its classification

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of nylon twine under the Central Excise Tariff. The appellants had subjected duty paid nylon yarn to a twisting process to obtain nylon twine. The lower authorities had classified the twine under a different Tariff Item, leading to the appeal. The appellants argued that twisting yarn into twine should not change its classification under Tariff Item No. 18 CET, contending that twine still fell under the category of yarn. They relied on a judgment of the Bombay High Court to support their claim.

The Department, represented by the JDR, argued that twisting yarn resulted in a new product, twine, distinct from yarn. They cited various case laws to support their position. In response, the advocate for the appellants pointed out a Tribunal decision that held twisted yarn, termed as fancy spun yarn, continued to be classified as yarn under Tariff Item 18. The Tribunal noted that the goods in question, nylon twine, were considered yarn by the Bombay High Court in a similar case, with no contradictory judgments presented. The Tribunal also referred to a previous decision involving fancy spun yarn, emphasizing that the end product's classification remained under Tariff Item 18. They highlighted that the lower authorities had not thoroughly examined whether further duty was required on the twine.

Ultimately, the Tribunal held that nylon twine fell under Tariff Item No. 18-II(i)(a) as yarn. However, they noted the need for the lower authorities to assess whether additional duty was applicable to the twine. As a result, the appeal was allowed by remand for further examination on this specific issue, emphasizing the importance of a detailed assessment by the lower authorities.