TMI Blog2017 (4) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... , With Civil Appeal No. 7253 of 2009 And Civil Appeal No. 11204 of 2014 - - - Dated:- 27-4-2017 - MR. A.K. SIKRI AND MR. ASHOK BHUSHAN JJ. For the Petitioner : Mr Jay Savla For the Respondent : Not Avaliable JUDGMENT A.K. SIKRI, J. All these appeals involve identical dispute, which pertain to classification of the goods known as Polyester Covered Yarn and Nylon Covered Yarn. Whereas the appellants/assessees argue that these products are covered by Chapter No. 56 and come under CSH No. 5606.06, the Revenue has taken the position that the aforesaid goods fall in CSH No. 5402.62/61. The stand of the Civil Appeal No. 5805-5807 Of 2009 Ors. Page 1 of 12 Page 2 Revenue has been accepted by the Customs Excise Service Tax Appellate Tribunal (for short CESTAT ) which is challenged by the assessees in these appeals. For the sake of convenience, we shall take note of the facts from Civil Appeal Nos. 5805-5807 of 2009. 2) The aforesaid two products, namely, Polyester Covered Yarn and Nylon Covered Yarn are manufactured by the appellants by applying the process of conventional covering on machine MENEGATTO Model 1500/2000 and also separately by applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke note of the two competing entries. Chapter 54 deals with Man-Made Filaments and CSH 54.02, with which we are concerned, pertains to Synthetic filament yarn, other than sewing thread. Various sub-heads of Heading No.54.02 are as under: Heading No. Sub-heading No. Description of goods Rate of duty Basic Additional 54.02 Synthetic filament yarn (other than sewing thread), including synthetic monofilament of less than 60 Deniers 5402.10 - High tenacity yarn of nylon or other polyamides 16% 5402.20 - High tenacity yarn of polyesters 16% 5402.61 - Of nylon or other polyamides 16% 5402.62 - Of polyesters 16% 6) There are four chapter notes and for the purposes of these appeals, chapter note 3 needs to be kept in mind. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the cover threads. ( emphasis added) 9) He also sought to draw sustenance from the dictionary meaning of gimp yarn which is defined in Fairchild s Dictionary of Textiles, 7th Edition authored by Phyllis G. Tortora and Robert S. Merkel in the following manner: gimp yarn A fancy yarn made of one or more strands twisted around a central core and delivered at a faster rate to form a distinct spiral effect. The outer yarns often are colored and coarser than the core yarns. Gimp yarns originally were made of silk twisted around a fine wire or strong cord. Uses: trimming, lace, embroidery. 10) He further submitted that the Tribunal wrongly held that HSN Explanatory notes would not apply in the instant case. 11) Counsel appearing in other appeals adopted the same arguments. 12) Mr. Radhakrishnan, learned senior counsel appearing for the Revenue, submitted, per contra, that the matter was examined in its all length and breadth, taking into consideration every relevant fact that the products were covered by Chapter Heading 5402.62/61. For this purpose, he extensively read the facts stated in the show cause notice, reasoning given by the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r words Nylon is predominant ranging from 75% to 97.5% and the two yarns are held together by way of intermingling. 7. Further the gimped yarn is defined in explanation (A) to Ch.H.56.00 under section XI of explanatory note to HSN. According to explanatory notes, gimped yarns are compressed 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 the core, but in some case the turns of the spiral are spaced. In the latter case product may have some what the appearance certain multiple (folded), cabled or fancy yarn of chapter 50 to 55 but may be distinguished from them by the characteristic of gimped yarn that the core does not itself undergo a twisting with the cover threads. In gimped yarn, the yarn forming the loop is wrapped around the core yarn and is held on place by binder or tie yarn. The manufacture requires two distinct twisting operation after the yarn is first made, it is twisted opposite direction to establish the desired effect. It may have the loops formed by a very soft and slackly twisted yarn. These yarns falls under Chapter Heading 56.06 of the Tariff as special yarn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was proposed on the principle of pre-dominance of textile material used. The Order-in-Original was passed by the Assessing Authority, taking note of the dominance of Polyester or Nylon yarn in the manufacturing of the said product. The Assessing Authority also referred to tests reports from Man Made Textile Research Association (MANTRA) which also supported the version of the Revenue. Contention of the assessees that the product should be covered under Chapter Heading 56.06 was turned down by the Assessing Officer in the following manner: 28. The assessee has claimed the classification of their covering yarn manufactured by way of attachment by applying pressurized air in Air Jet machine under Chapter Sub-heading 56.06 of Central Excise Tariff. Accordingly, on perusal of said entry in Central Excise tariff, it is seen that Chapter Sub-heading No. 56.06 covered gimped yarn, and strop and the like of heading No. 54.04 or 54.05, gimped (other than those of Heading No.56.05 and gimped horse hair); chenille yarn (including flock chenille yarn); lop wale yarn. Since the assessee has claimed polyester and Nylon covering yarn as gimped yarn under Chapter Sub-heading 56.06 of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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