JUDGMENT

These are two appeals by the Union of India from the order of the Central Excise and Gold (Control) Appellate Tribunal in the case of Rajasthan Spinning & Weaving Mills Limited.

2. The respondents manufacture yarn falling under items 18, 18B etc. of the Central Excise Tariff as it stood at the relevant time. They manufactured three types of yarns containing polyester, viscose, and acrylic ,fibres. In one of the appeals, the yarn manufactured by the assessee consisted of polyester, viscose and acrylic fibre in the proportion of 24: 26: 50. In the other appeal, there were two types of yarns - one in which the above fabrics were mixed in the ratio of 24: 26: 50 and the other in which the fabrics were mixed in the ratio of 45: 5: 50. There was another category of yarn in which the polyester and acrylic fibre were mixed in equal proportions but with that we are not concerned in the present appeals.

3. Two questions arose for the consideration of the Tribunal. The first was whether the composite yarn manufactured by the assessee could be treated as a separate item of goods on which excise duty could be levied. This question has been answered in favour of the Revenue and that conclusion has to be upheld in view of the decision of this Court in Aditya Mills v. Union of India, (1988) 37 ELT 471.

4. The second question, which is the only question which survives before us, is as to whether the categories of yarn we have referred to earlier manufactured by the assessee, could be brought within the terms of tariff item No. 18B(ii). This tariff entry reads as under:

"18B. Woollen and acrylic spun yarn

Yarn, in which wool or acrylic fibre or both predominates or predominate in weight and in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power

(i) xxx xxx xxx

(ii) containing more than one-sixth by weight of non-cellulosic fibre (other than acrylic fibre) calculated on the total fibre content."

5. In order to determine whether the wool or acrylic fibre predominates in weight, the Tribunal has taken the view that a fibre can be said to predominate in weight only where its weight exceeds 50% of the total weight of the composite yarn. The reasoning of the Tribunal for coming to this conclusion has been succinctly stated by it in its earlier decision in Gaekwar Mills Ltd. v. Collector of Central Excise, 1983 ELT 2491 at pages 2494 and 2495 (CEGAT). On the other hand, the point made by Shri Gauri Shankar Murthi, learned Counsel for the appellant is that since, in the three categories of yarn with which we are concerned, the percentage of acrylic fibre by weight is 50% as compared to the other two fibres which are either 24% and 26% or 45% and 5%, acrylic fibre must be said to predrominate in weight in the composite yarn manufactured by the assessee.

6. We have heard learned Counsel appearing for both the parties and, after careful consideration, we have come to the conclusion that the contentions urged on behalf of the appellant has to be accepted. Items 18 to 18I form one group of entries dealing with composite yarn of various categories. Item 18A defines cotton yarn as yarn in which cotton predominates in weight. Item 18B talks about woollen and acrylic spun yarn as yarn, in which wool or acrylic fibre or both predominates or predominate in weight. Item 18C deals with silk yarn in which silk predominates in weight and so on. In other words, the tariff items proceed on the assumption that there are various types of composite yarn which consist of different categories of yarn which are spun together and the entry specifies that the composite yarn should be treated as belonging to the categories in which one relevant category predominates in weight. The entry obviously envisages a comparison between the weight of the particular yarn with which the entry deals in comparison with the other categories of yarn which go into its composition. In fact, Explanation III to sub-item (iii) under Tariff Item No.