Tariff classification of spun yarn turned on whether synthetic waste is equivalent to non-cellulosic fibre for excise purposes.

Cellulosic spun yarn made by blending viscose fibre of cellulosic origin, predominating by weight, with non-cellulosic waste was classified under Tariff Item 18-III(i) rather than 18-III(ii). The Tribunal treated non-cellulosic waste as distinct from non-cellulosic fibre for tariff purposes, noting that waste is marked by variable lengths and lack of homogeneity, while staple fibre has controlled, relatively uniform length. It found that the blending material was synthetic waste, not non-cellulosic fibre in the statutory sense, and rejected the Department's contention that fibre arose only at the spinning stage. Classification therefore followed the nature of the input used in manufacture.

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Issues: Whether cellulosic spun yarn manufactured by blending viscose fibre of cellulosic origin, which predominates by weight, with non-cellulosic waste is classifiable under Tariff Item 18-III(i) or under Tariff Item 18-III(ii) of the erstwhile Central Excise Tariff.

Analysis: The dispute turned on whether non-cellulosic waste could be treated as the same thing as non-cellulosic fibre for the purpose of classification. The Tribunal followed its earlier decisions distinguishing waste from staple fibre, holding that waste is characterised by varying lengths and lack of homogeneity, whereas staple fibre is of controlled, relatively uniform length. The record showed that the material used in blending was synthetic waste and not non-cellulosic fibre in the statutory sense. On that basis, the Department's reasoning that fibre emerged only at the spinning stage was rejected.

Conclusion: The yarn was held classifiable under Tariff Item 18-III(i) and not under Tariff Item 18-III(ii), and the issue was decided in favour of the assessee.

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