Pioneer Sports Works Pvt. Ltd. vs Collector Of Central Excise>1993(04)LCX0058

1993(04)LCX0058

BEFORE THE CEGAT, SPECIAL BENCH ‘D’, NEW DELHI

S/Shri K.S. Venkataramani, Member (T) and G.A. Brahma Deva, Member (J)

PIONEER SPORTS WORKS (P) LIMITED

Versus

COLLECTOR OF CENTRAL EXCISE

Order No. E/129/93-D, dated 2-4-1993 passed in Appeal No. E/2763/85-D

Cases Quoted

Aditya Mills Ltd. v. UOI — 1988(08)LCX0061 Eq 1988 (037) ELT 0471 (SC) ........................................................ [Para 2]

Shree Radhe Industries v. Collector — 1982(12)LCX0032 Eq 1983 (012) ELT 0379 (Tribunal).............................. [Para 2]

Garware Nylon Ltd. v. UOI — 1980(04)LCX0012 Eq 1980 (006) ELT 0249 (Bom.) ........................................... [Paras 2, 3]

Advocated By : Shri Harbans Singh, Advocate, for the Appellants.

Smt. J.M.S. Sundaram, SDR, for the Respondent.

[Order per : G.A. Brahma Deva, Member (J)]. - The point to be considered in this appeal whether “nylon bristles and fishing lines” commonly known as ‘Nylon filament’ manufactured by the appellants are classifiable under Tariff Item No. 18 of the erstwhile Central Excise Tariff or not. The Assistant Collector held that the item in question is classifiable under Tariff Item 18 and this view was upheld by the Collector (Appeals) observing that the scope of Item No. 18 is not confined to fabrics and yarn used in wearable fabrics only. Not being satisfied with the findings given by the lower authorities, the appellants have come before us.

2. During the material period tariff description of Item No. 18 read as under :-

“RAYON AND SYNTHETIC FIBRES AND YARN, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER

Explanation. - “Rayon and Synthetic fibres and yarn” shall be deemed to include :-

(i) man-made fibres;

(ii) spun (discontinuous) yarn containing not less than ninety per cent by weight of man-made fibres calculated on the total fibre content;

(iii) man-made filament (continuous yarn; and (iv) man-made metallic yarn.”

Arguing for the appellants Shri Harbans Singh, learned Advocate submitted that the persons who have been dealing with the products in question since more than 20 years have authoritatively stated that these Nylon fishing lines or Nylon bristles are never referred to in the trade as yarn but always as fishing line or bristles as can be seen from the affidavits filed before the adjudicating authority. He said that this position was not rebutted by the Department and hence one should not go into technical sense while determining the item under Tariff but it should be understood in the popular sense as known in the trade circle. He referred to the decision of the Supreme Court in the case of Aditya Mills Ltd. v. Union of India, reported in 1988(08)LCX0061 Eq 1988 (037) ELT 0471 (S.C.) wherein it was held that for ascertaining the correct meaning of a fiscal entry reference to a dictionary is apt to be a somewhat delusive guide as it gives all the different shades of the meaning. The trade meaning is always to be given preference. He said that the Collector (Appeals) erred in relying upon foreign book titled a man-made fibre by R.W. Moncrieff, Sixth Edition while deciding the classification of the product instead of following the view of the Indian Standard Institute in this regard. According to Indian Standard IS: 1324-1966 Glossary of Textile Terms relating to man-made fibre and fabric Industry (1st Revision) Page-18 ‘Yarn’ is defined as under :-

“Yarn-A continuous strand of textile fibres or filaments with or without twist suitable for plying, knitting braiding, weaving, or otherwise intertwining form a textile end product. Yarn occurs in the following forms :-

(a) Spun Yarn - A yarn composed of fibres (short length or staple), twisted together;

(b) Filament yarn - A yarn composed of continuous filaments assembled with or without twist;

(d) A narrow strip of materials, such as paper, cellophane or metal foil, with or without twist.”

He contended that since entry does not speak the item in question as such and in view of the definition given in the ISI, the products are not suitable for plying, knitting, braiding, weaving, or otherwise intertwining to form a textile end product and same cannot be held to be known as ‘yarn’ in India. He said that the raw material used for manufacturing bristles and fishing lines is Polyamide chips and not caprolactum and that the nylon bristles are in lengths of 15.25 inches and are, therefore, not in continuous form and cannot be said to be yarn. He said that Collector is not correct in including this item on the ground that definition under tariff entry is an inclusive definition without taking into consideration that Explanation to the tariff entry specially includes some item and not the Nylon bristles and fishing lines as such. He referred to the decision in the case of Shree Radhe Industries, Kalol v. Collector of Customs and Central Excise, Ahmedabad, reported in 1982(12)LCX0032 Eq 1983 (012) ELT 0379 (C.E.G.A.T.) wherein it was held that since the HDPE tapes are neither man-made filament yarn nor cellulosic spun yarn, therefore, do not fit into any category of Item 18 of CET. Nor do they fall under Item 18E as they are not non-cellulosic spun yarn. He said that in the absence of sufficient prescriptive or descriptive details of the goods, the classification of goods under one tariff item or the other becomes ambiguous and doubtful and the benefit of doubt always goes to the assessee relying upon the ratio of the decision in the case of Garware Nylone Ltd. v. Union of India & Other - 1980(04)LCX0012 Eq 1980 (006) ELT 0249 (Bom.).

3. While countering the arguments Smt. J.M.S. Sundaram learned Senior Departmental Representative submitted that neither raw-material used in the manufacture of the product in question nor end use is relevant to decide the issue of classification of the product since it talley’s with the description as given under relevant Tariff Item No. 18. This being man-made filament (continuous yarn) as specified under Section 111 in the Explanation to the Tariff Entry 18 and since tariff entry does not restrict to the item wearing fabrics/yarn used for manufacture of textiles, the Department was satisfied in classifying the item under Item 18. She said that yarn has not multiple uses and since it is capable of being used in textile operation it cannot go out of the perview of the Tariff Item 18 on the ground that this was used in non textile operation and this product was not known as ‘Yarn’ in the trade circle. Trade is known by end product and nevertheless it is a man-made filament as appeared in tariff entry. She said that decision cited by the appellants’ Counsel in the case of Garware Nylone Ltd. (supra) supported the Department’s case while deciding the issue of classification of Nylon twine with reference to Item 18. In that case it was held that “although it is special type of yarn which is prepared mainly to make it suitable for being utilised in the manufacture of fishing nets or ropes, yet after the special process being applied to it, it retains its character as a nylon yarn and no new product emerges. The mere application of a special process or giving it a different name a nylon twine, cannot debar it from being considered as nylon yarn". Definition given in IS:1324-1966 also refers to yarn occurs in the form of a monofilament, with or without twist and since this monofilament is specified under Chapter Heading 54.04 and in view of the definition that “All these products are generally in long lengths but remain classified here even if cut into short lengths and whether or not put up for retail sale. They are used according to their different characteristics in the manufacture of brushes, sports rackets, fishing lines, surgical sutures upholstery fabrics, belts, millinery, braids etc. under that Chapter which strengthened view of the Department that it should be classified under Item 18 for the relevant period. She said that there is nothing wrong in relying upon the foreign books if they are authoritative on the subject like in the present case and accordingly Page-351 in the Book titled Textile (Sixth Edition) Fiber to Fabric by Bernard P. Corbman refers to that the monofilament yarns are used for hosiery and for industrial filters and similarly in Page-247 in the Book Nylon Plastics Edited by Melvinl Kohan, it is said that the most familiar and important use of nylon monofilaments is in brush bristles. Monofilaments, however, are also used for fishing line, sewing thread, clothing stiffeners, and a variety of woven screens for filters.

4. In reply, Shri Harbans Singh submitted that whether, it can be used as yarn, is not the criteria to decide the issue in the absence of evidence on record that it was used and Monofilament as such was referred in the new tariff and hence same cannot be relied upon while deciding the issue with reference to old tariff. We have carefully considered the submissions made by both sides and perused the records. The Department’s view in this case is that the monofilaments having cross section dimention not exceeding 1 mm and weight upto 1 grame per metre are rayon and synthetic yarn covered under Tariff Item 18 since tariff item covers all types of synthetic yarn and its scope is not confined to yarn used in wearable fabrics only. Sufficient evidence was brought on record by the appellants to show that this product is known in the trade circle as nylon bristles and not as yarn and this position was not rebutted by the Department. Tariff Item No. 18 does not define yarn although it refers to monofilament without explanation unlike specific item under the new Tariff Entry 54.04 with Explanation. Further, this does not conform to the definition of the term yarn given in the Glossary of Textile Terms relating to the man-made fibre and fabrics industries IS: 1324-1966 as it was rightly argued by the appellants. In view of the discrepancies and in the absence of sufficient prescriptive or descriptive detail of the product in question, under old Tariff Item 18, we feel that there is some ambiguity on the issue of classification. Since it becomes ambiguous and doubtful whether the item in question was classifiable under old Tariff Item 18 or not, we feel that benefit of doubt should be given in favour of the assessee as it is a rule under the fiscal statute. With this view, we set aside the impugned order and accordingly the appeal is allowed with consequential relief.

Equivalent 1993 (68) ELT 627 (Tribunal)