1997 (7) TMI 333 - AT - Central Excise

Summary

Issues: Classification of Taspa Yarn under Central Excise Tariff Act, 1985

Classification of Taspa Yarn:
The case involved the classification of Taspa Yarn manufactured by the appellants under Heading 56.06 of the Central Excise Tariff Act, 1985. The Show Cause Notice alleged that the Taspa yarn produced fell under the category of Special yarn, and a duty demand was made. The Additional Collector of Central Excise & Customs, Surat confirmed the demand, stating that the yarn manufactured by the appellants met the description of special yarn under Heading 56.06 and imposed a penalty.

Appellant's Argument:
The appellant's counsel argued that the Taspa yarn manufactured did not contain a core yarn, which according to the Board's Tariff Advice was essential for classification under Heading 56.06. They also presented a certificate stating that the Taspa yarn did not have a core-type configuration, thus should not be classified as a special type of yarn under the mentioned heading.

Respondent's Contention:
The JDR for the respondent contended that the existence of a core yarn was not a necessary requirement for classifying the goods under Heading 56.06. The Taspa yarn, as per the appellant's statement, did not fall under Chapters 54-55 and should be classified as other special yarn under Heading 56.06.

Judgment and Analysis:
The Tribunal considered the submissions and examined the process of manufacturing Taspa yarn. The yarn was produced by twisting polyester and nylon yarns under different tensions to create a slub effect. The Tribunal noted that the Tariff Heading covered "Other special yarns," indicating a wide amplitude of classification. The Textile Terms and Definitions described fancy yarn as having deliberately produced irregularities, which aligned with the production process of the Taspa yarn. The Tribunal concluded that the yarn's construction deviated from normal yarns, justifying its classification under Chapter 56 as other special yarn. The penalty imposed on the appellants was set aside due to Trade Notices causing confusion regarding the classification. The appeal was disposed of accordingly.

Conclusion:
The judgment upheld the classification of Taspa yarn as other special yarn under Heading 56.06 of the Central Excise Tariff Act, 1985, based on the unique construction and characteristics of the yarn. The penalty imposed on the appellants was revoked due to the confusion caused by Trade Notices.