Customs, Excise and Gold Tribunal - Mumbai
Jay Monofilaments Pvt. Ltd. vs Cce on 8 January, 2004
Equivalent citations: 2004(166)ELT238(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The question for consideration in these appeals is the eligibility to exemption contained in entry 119 of the table to notification 5/98 and similarly worded entries in other notifications manufactured by the appellant. In the order impugned in these appeals, the Commissioner has held that the goods would not be entitled to be exemption, demanded duty consequently payable on the yarn cleared in terms if the exemption and imposed penalties on the manufacturer and on Pankaj Rungta, its director Hence these appeals.
2 The entries in the notifications are identically worded. We will consider, for the discussion, entry 119 of the table to notification 5/98. This exempts from duty nylon monofilament yarn falling in chapter heading 5404.10 of denierage 210,330,420,630,840,1050 or 1680, with tolerance of 4 per cent. Notice issued to be appellant proposed to deny the exemption on two grounds , firstly that the goods were not nylon monofilament yarn, and secondly that they were not of the denierage specified in the entry. In her order, the Commissioner has denied the exemption on the ground that the goods were nylon monofilament classifiable in heading 5404.10 an not nylon monofilament yarn and therefore not entitled to the notification.
3 We have already reproduced the words of the entry in the notification. Heading 5404 and its sub heading reads as below: "54.04- Synthetic monofilament of 60 Deniers or more and of which no cross sectional dimension exceed I mm; strip and the like ( for example, Artificial Straw) of synthetic textile materials of an apparent width not exceeding 5 mm. 5401.10 Monofilament >5404.90-Other
4. In her order, the Commissioner has denied the exemption to nylon monofilament yarn cleared by the appellant in hanks or in cut lengths.During the hearing, it emerged that the hanks were to be used in making fishing nets and the cut lengths are to be used for brushes or bristles. The Commissioner finds, by reference to the technical dicitionary, yarn must have essential characteristics of being continuous. She has summarised her views in paragraph 4 of her order.
"41. In view of the foregoing discussion and factual position, it is clear that the Nylon monofilament, which is in continuous form and suitable for plying, knitting , braiding , weaving , knitting of rope making, only can be treated as NMY. The product manufactured by M/s JMPL is single filament in continuous length and cut further, is not suitable for such uses and in fact is used as fishing lines and bristles. I therefore, hold that the product manufactured by M/s JMPL and cleared in the ahdn form/cut rolls for fishing lines and bristles is Nylon Monofilament, not "yarn" and hence cannot be considered as Nylon Monofilament yarn, which merits classification under CSh No 5404.10. Further even when Nylon Monofilament of continuous length is cut into short lengths as bristles, the product still remains classified under the CSH 5404.10 although having different characteristic than Yarn. Therefore, the argument for alternative classification advanced by M/s JMPL is not tenable in view of the exclusion provided by the chapter note discussed above."
5. The words of heading 54.10 or any of its sub heading do not refer to "yarn" as such. The difficulty arises because the heading does not refer tp yarn,and the exemption notification applies yarn.
6. Chapter 54 of the Central Excise Traiff does not contain any note that refers to heading 54.10. The note that the Commissioner refers to na discussesn earlier in her order is the Explanatory Note to Heading 54.04 in the Harmonised System of Nomenclature.The Commissioner reproduces these notes in her order. The notes explain that heading covers synthetic monofilament strips and the like of synthetic textile materials of the specifications mentioned therein. The notes go on to say "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."
7. The Commissioner has ruled out any alternative classification claimed by the appellant,relying on the Explanatory Notes. The Commissioner's view is both monofilament yarn and yarn are classifiable in sub heading 10 or heading 54.04. Sub heading 10 in fact only contains one word "monofilament". If the Commissioner's contention were to be accepted and the goods being monofilament are different from monofilament yarn, it would follow that sub heading 10 of heading 54.04 must include the word "monofilament yarn" or some such description so as to distinguish them from monofilament. As the entry stands however sub heading 10 is only for monofilament.
8. It is a well settled principle of judicial interpretation that nothing must be construed in such a manner as to render the words of any legislation meaningles or redundant. We have seen that the sub heading 10 covers only monofilament. The exemption is for nylon monofilament yarn. The only possible way of reconciling these two is therefore to say bthat monofilament figuring in heading 5404.10 also includes if there is such any separate from monofilament, monofilament yarn.
9. It isn no doubt true, as the Commissioner has said, that yarn generally refersnm to a textile product which is used by means of weaving knitting etc. However , it is not disputed that monofilament that is used as yarn. It isn significant that the Commissioner has in fact said that the monofilament in continuous length alone is the yarn as it is used for weaving. It is clear that the words of the Explantory Notes that have been referred to in the paragraph above become significant. They are in our opinion, specifically intended to say that the goods would be classifiable in sub heading 10 of heading 540 even if they are cut length and therefore not put to use in the manner in which filament are used to be put to use. There would otherwise be no need to incorporate these words at all. Monofilament therefore whether it is in short length or not is classifiable in heading 5404.10 and would necessarily have to be covered the term of the exemption for the reasons that we have indicated above.
10. The departmental representative relies upon the judgement of the Supreme Court in Aditya Mills Ltd vs Union of India 1988(37) ELT 471 to say yarn must necessarily meant for use in weaving weaving,knitting or rope making. The Supreme Court , while relying to its earlier judgement to say that yarn should be primarily meant for using weaving, knitting or rope making is not manufacture with the finding of fact of the Tribunal in its order appeal before that Court that yarn come into-existence. The emphasise on the term "primary" is relevant.Yarn that primarily used for such purpose but may not always be used only for this. In fact the Panaji bench of the Bombay High Court in Sainet Private Ltd and another vs Union of India and another 1984(18) ELT 141 that fishing net is a fabric because tc the appellant with regard to yarn clear for making fishing nets.The decision of the Tribunal in ZEB Monoplast (P) Ltd vs CCE 2001(131) ELT 624 held that monofilament was classifiable in heading 39.26 as an article ofm plastic and not in heading 54.06. That decision will have no relevance to the issue before us. We are concerned here with the classification of the product in heading 39.26. The Commissioner having accepted this classification in heading 5.404.10 but only with the applicability of the notification.
11. We are therefore satisfied that benefit of the exemption would be available to the monofilament is question and therefore we have not considered the arguments on limitation. We note however that the Commissioner has not dealt with the otehr ground in the notice, that monofilament was not of the denier specified in the entries of the table to the notification. We think it appropriate that a finding should be given on this aspect. For the prupose therefore the matter is remanded to the Commissioner for adjudication in accordance with law.
12. The appeals are allowed and the impugned order set aside.