Textured yarn classification upheld for bulked acrylic yarn; concessional notification inapplicable and double levy plea rejected.

Acrylic hand-knitting bulked yarn that acquired noticeable bulk through steaming or similar hot or wet processing was treated as bulked yarn and therefore textured yarn, falling under Tariff Item 18(ii) rather than Item 18(i). Because the concessional Notification No. 27/75 applied only to yarn under Item 18(i), the goods did not qualify for the concession. The plea that duty under Item 18(ii) involved double levy was rejected, as the tariff separately charged the further processed textured yarn even if the base yarn had already suffered duty. The revision application failed and the duty demand was sustained.

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Issues: (i) Whether acrylic hand-knitting bulked yarn was classifiable under Tariff Item 18(ii) as textured yarn produced out of base yarn, or under Tariff Item 18(i) as fibres and yarn other than textured yarn; (ii) Whether Notification No. 27/75 dated 01-03-1975 applied to the goods; (iii) Whether levy under Tariff Item 18(ii) amounted to double levy of duty.

Issue (i): Whether acrylic hand-knitting bulked yarn was classifiable under Tariff Item 18(ii) as textured yarn produced out of base yarn, or under Tariff Item 18(i) as fibres and yarn other than textured yarn.

Analysis: The goods were found to acquire noticeable bulk through steaming and similar hot or wet processing. Bulked yarn was treated as capable of being produced not only from continuous filament yarn but also from staple yarn. Explanation I excluded bulked yarn and stretch yarn from the category of fibres and yarn other than textured yarn, while Explanation II treated bulked yarn as textured yarn. On that construction, the goods were held to fall within the textured yarn entry.

Conclusion: The classification under Tariff Item 18(ii) was upheld and the contention for classification under Tariff Item 18(i) failed.

Issue (ii): Whether Notification No. 27/75 dated 01-03-1975 applied to the goods.

Analysis: The notification was restricted to yarn falling under sub-item (i) of Item 18. Since the goods were held not to fall under sub-item (i), they could not derive any benefit from the notification.

Conclusion: The claim to concessional treatment under Notification No. 27/75 was rejected.

Issue (iii): Whether levy under Tariff Item 18(ii) amounted to double levy of duty.

Analysis: Duty under Item 18(ii) was levied on textured yarn produced out of base yarn. The fact that the base yarn had already suffered duty did not negate the charge on the further processed commodity under the tariff entry applicable to it.

Conclusion: The plea of double levy was rejected.

Final Conclusion: The revision application failed in entirety, and the classification and duty demand under Tariff Item 18(ii) were sustained.

Ratio Decidendi: Where the tariff entry expressly includes bulked yarn within textured yarn, a processed yarn that acquires noticeable bulk by hot or wet treatment is classifiable under the textured yarn entry, and any concessional notification confined to a different sub-item cannot be applied.

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