Clarification clearance of yarn waste

[RAMESH ANANTHAKRISHNAN]

We are engaged in the manufacture of nylon monofilament yarn covers under chapter 54 (man made fibres). We produce various dia meters of yarn. Monofilament upto 1.00mm covers under chapter 54, Monofilament above 1.00mm covers under chapter 39. Our input is Nylon chips which also covers under chapter 39. As you know that any manufacturing there will be a waste generation. In our case the waste also in the monofilament yarn form. It is not possible for us to store the yarn waste as per the thickness of the yarn. Hence we are clearing the yarn waste on payment of appropriate duty under chapter 54 but department insists us to clear the yarn waste under chapter 39 as the rate of duty is more than in chapter 54. Kindly advise whether department view is right.

AI Summary

Manufacturer Seeks Clarification on Nylon Yarn Waste Classification Under Central Excise Rules; Dispute Over Chapter 54 vs. 39 A manufacturer of nylon monofilament yarn is seeking clarification on the appropriate classification for clearing yarn waste under Central Excise rules. The company produces yarn of varying diameters, with monofilament up to 1.00mm classified under chapter 54 and above 1.00mm under chapter 39. The waste generated is in monofilament form, and the company currently clears it under chapter 54, but the department insists on chapter 39, which has a higher duty rate. An advisor disagrees with the department, suggesting classification should follow the specific nature of the goods and notes that post-7-7-2009, the duty rate is 8% under both headings.