Chapter Note controls classification of soft waste from fibre purchased for yarn manufacture under the excise tariff.

Chapter 55 Note 3 confines sub-headings 5503.11, 5503.12, 5503.19 and 5503.20 to waste arising in or in relation to manufacture of man-made staple fibre. Soft waste generated from non-duty-paid fibre purchased for yarn manufacture did not satisfy that condition because the assessee did not manufacture staple fibre. The HSN Explanatory Notes could not override the specific Chapter Note, and Note 4 was inapplicable on the facts. The waste therefore did not fall under sub-heading 5503.19 or 5503.20, and the classification adopted by the lower authorities was incorrect.

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Issues: Whether soft waste arising at the mixing stage to simplex stage from non-duty-paid fibre purchased for export was classifiable under sub-heading 5503.19 or 5503.20 of the Central Excise Tariff.

Analysis: Note 3 to Chapter 55 confines sub-headings 5503.11, 5503.12, 5503.19 and 5503.20 to waste arising in or in relation to the manufacture of man-made staple fibre. The assessee did not manufacture staple fibre and merely purchased it for yarn manufacture. The waste in dispute therefore did not arise in or in relation to the manufacture of man-made staple fibre. The HSN Explanatory Notes could not override the specific Chapter Note, and Note 4 was also inapplicable to the goods in question.

Conclusion: The soft waste did not fall under sub-heading 5503.19 or 5503.20 and was wrongly classified by the lower authorities.

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