In Brief
Sarla Performance Fibers manufactured polyester and nylon covered yarns by joining two different yarns via pressurised air (air mingling). The Company classified these as gimped yarn under Chapter 56.06 of the Central Excise Tariff, but Revenue contended they were synthetic filament yarn under Chapter 54. The Court held that gimped yarn requires spiral winding around a core held by tie yarn, which the subject goods lacked. Since the yarns were merely intermingled by compressed air without a distinct core structure, they fell within Chapter 54 as air mingled yarn, classifiable by predominance of the heavier component (polyester or nylon). The appeals were dismissed.
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