Air mingled polyester and nylon yarn classified as synthetic filament yarn, not gimped yarn, under tariff interpretation rules.

Polyester Covered Yarn and Nylon Covered Yarn made by air covering were held not to be gimped yarn under Heading 5606, because the evidence showed the core yarn was air mingled with Lycra/Spandex and not spirally wound, wrapped, or secured by binder or tie yarn. Applying Chapter Note 3 of Section XI, the HSN explanatory material, and Rule 3(a) of the Interpretation Rules, the Court accepted the concurrent factual findings that the products were air mingled yarn. As polyester or nylon predominated by weight, the goods were correctly classified under Heading 5402 as synthetic filament yarn, and the challenge to the Revenue's classification failed.

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Issues: Whether the goods known as Polyester Covered Yarn and Nylon Covered Yarn manufactured by the air covering process were classifiable under Heading 5606 as gimped yarn or under Heading 5402 as synthetic filament yarn; and whether the classification had to follow the principle of predominance of textile material used.

Analysis: The competing tariff entries were examined with reference to Chapter Note 3 of Section XI and the relevant HSN explanatory material. The goods were found to be manufactured by air mingling of polyester or nylon with Lycra/Spandex, and the evidence showed that the core yarn was not wound spirally, wrapped around the core in the manner of gimped yarn, or held by a binder or tie yarn. The authorities below and the Tribunal had recorded concurrent factual findings, supported by technical reports, that the product was not gimped yarn but air mingled yarn. Since polyester or nylon predominated by weight, the classification had to follow the more appropriate synthetic filament yarn heading rather than the special yarn heading claimed by the assessees. Rule 3(a) of the Rules for the Interpretation of the Schedule also supported adoption of the heading giving the most specific description applicable to the product.

Conclusion: The goods were not classifiable under Heading 5606 and were correctly classified under Heading 5402. The challenge to the Revenue's classification failed.

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