TMI Blog2010 (12) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... tage of lycra the disputed goods viz lycra spandex yarn is correctly classifiable under 5205.11 as per HSN, which is to be given precedence over the SITRA reports which is not based on HSN – Appeal is disposed of by setting aside classification under CET sub-heading 5606.00 and holding that the correct classification is CET sub-heading 5205.11 and Appeal Nos.1064 & 1085/04 are dismissed - E/1064/04, E/1085/04 & E/387/08 - 1265-1267/2010 - Dated:- 14-12-2010 - Ms. JYOTI BALASUNDARAM, Dr. CHITTARANJAN SATAPATHY JJ, Ms. L. Maithili, Advocate For the Appellant/s Shri T. H. Rao, SDR For the Respondent/s These three appeals involve a common issue of classification of cotton lycra core spun yarn manufactured by all three appellants and are hence heard together and disposed of by this common order the claim of the assessees is that the goods fall for classification under CET sub-heading 5205.90 while, according to the Revenue, they fall under CET sub-heading 5205.11/5606.00. 2. E/387/2008 Pallipalayam Spinners Pvt. Ltd. The assessees had claimed classification of the goods under CET sub-heading 5205.11 until Nov2000. With effect from December 2000, they filed a fresh decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton Spun Yarn and not as Single Yarn. Vide Order-in-Original dt.27.12.06, the Deputy Commissioner accepted the claim of the assessees for classification under CET sub-heading 5205.90; the department challenged the order by filing appeal before the Commissioner (Appeals), seeking classification under chapter heading 56.06 and the Commissioner (Appeals) vide impugned order, allowed the Revenues appeal for classification under CET sub-heading 5606.00. 3. Appeal Nos.E/1064 1085/04 - Arunachala Gounder Textile Mills (P) Ltd. M/s. P.K.P.N. Spinning Mills (P) Ltd. In the case of PKPN Spinning Mills, out of five SCNs issued, four notices covering the period September 2000 to 15.10.2001 proposed classification under chapter heading 56.06 and one SCN covering the period 16.10.01 to Feb 2002, proposed classification under CET sub-heading 5205.11/19. In the case of Arunahcala Gounder Textile Mills, three SCNs were issued; notice dt. 2.1.2002 covering the period December 2000 to June 2001 proposed classification under CET sub-heading 5606.00 while the other two notices dt. 1.8.02 and 31.12.02 covering the period July 2001 to Nov01 and Dec01 to Feb02 respectively proposed classificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such cases in the heading having highest amount of duty payable. Existing paragraph D of Section Note 2 has been shifted to Chapter 54 as Note 1. [Fourth and fifth Schedules to the Finance Bill, 1995] Note 12 is being substituted by a note so as to provide the definition of twine, cordage, ropes and cables. Note 13 is being omitted. Instead, SUB-HEADING Notes have been added on the lines given in the HSN for defining various expressions as well s the rule for classification of the products for Chapters 56 to 63 containing two or more textile materials. [Fourth Schedule to the Finance Bill, 1995]. 7. In the post-amendment period, the words other special yarn were deleted from Heading 56.06 and therefore only gimped yarn etc. remained. Simultaneously, a new entry at four digit level namely 5205 was introduced and the tariff became fully aligned with HSN. Since the core yarn is surrounded by staple fibre and not by yarn, the further finding of the Commissioner (Appeals) that core yarn does not undergo twist and therefore the subject goods are akin to gimped yarn under chapter heading 56.06 falls to the ground. It is also pertinent to note that the goods in dispute are used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of which any process is ordinarily carried on with the aid of power or steam : -- -- 5804.11 -- of cotton 20% 20% 5804.12 - - of man-made fibres 20% 20% 5804.19 -- of other textile material 15% 5804.90 -- other Nil According to the General Explanatory Notes to the CETA - where in column (3) of the Schedule, the description of an article or group of articles under a heading is preceded by - (single dash) the said article of group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading, where, however, the description of an article or group of articles is preceded by - - (double dash), the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has (single dash). 5. Reading the Heading 58.04 prior to its amendment? accordingly, it then follows that when the description lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 and not under 1601.19 of the CET. Chapter 16 is reproduced below : Preparations of Meat, of Fish or of Crustaceans, Molluscs or other Aquatic Invertebrates Heading No. Sub-heading No. Description of goods Rate of duty 16.01 Preparations of Meat,, of Fish,, or of Crustaceans, Molluscs or other Aquatic Invertebrates, including sausages and similar products, extracts and juices, prepared or preserved fish and caviar and caviar substitutes -Put up in unit containers and ordinarily intended for sale : 1601.11 - - Cooked, peeled and frozen prawns and shrimps Nil 1601.19 - Other 15% 1601.90 - Other Nil The contention of the appellants is that the products in question are other preparations of meat and are not cooked, peeled and frozen. So these are covered under sub-heading 1601.90 of CET. 13. We find that the General? Explanatory Notes to the CET provides that where in Col. 3 of the Schedule, the description of an article or group of articles under a heading is preceded by -, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e articles covered by these sub-headings are therefore sub-classification of the articles or group of articles, which are preceded by a single dash, that is, Containers ordinarily intended for the packaging of goods for sale. The description of goods under Heading 83.12.90 on the other hand is preceded by a single dash which indicates that the goods covered by this heading are sub-classification of the article or group of articles, covered by the Heading 83.12 which refers to Containers of base metal. In other words, 83.12.90 is sub-classification of the 83.12 which covers Containers of the Base Metal. The condition relating to Ordinarily intended for packaging goods for sale would therefore be attracted in the case of goods falling under Headings 83.12.11, 83.12.12, and 83.12.19 only. Since 83.12.90 is by virtue of simple dash sub-classification of containers of base metals without any condition relating to the packaging of goods for sale the impugned goods would be classifiable only under Heading 83.12.90. 10. Having ruled out classification under Chapter Headings 5205.90 and 56.06, we are now required to determine the correct classification. What comes out of the ring / spinni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filament is getting rotated between the front roller nip and traveler and therefore it also receives same amount of twist. In para 14 of OIO original authority stated that in the process of gimpex yarn the core does not itself under go twisting with the cover threads and therefore he has concluded in para 15 that covered spandex yarn does not merit classification under heading 56.06. Therefore he has classified the core spun yarn (covered spandex yarn) under sub heading 5205.11 as what emerges at the end of spinning process is a single yarn. 15. In all these cases the goods manufactured by the appellants consist of lycra spandex yarn which is sheathed by cotton fibres and finally what comes out from spinning frame is a single yarn and the same is rightly falls under sub heading 5205.11 as per HSN. Further this classification has been confirmed vide CESTAT order in the case of M/s. Micro Stretch Elastomers P Ltd Vs CCE Trichy reported in 2007 (215) ELT 190 Tri Chennai. 16. As per HSN (Page 855 Vol.2) Gimped yarn is composed of core, usually of one or more textile yarn, around which other yarn or yarns, are wound spirally. Most frequently the covering threads completely cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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