- (1.) MRS. SUJATA V. MANOHAR, J.: - These appeals and the transferred appeal raise a common question: whether polymer chips manufactured by the assessees and used by them in the manufacture of nylon yarn can be classified, for the purpose of levy of excise duty, under Item 15A in Schedule I to the Central Excises and Salt Act, 1944, as it stood during the period 1962 to 1972. For the sake of convenience we are setting out the facts in relation to the transferred appeal pertaining to M/S. Nirlon Synthetic Fibres and Chemicals Ltd.
(2.) AT all material times the company manufactured nylon yarn, a synthetic man-made fibre under an industrial licence granted by the Government of India. For the manufacture of nylon yarn, the company imported caprolactum monomer. The company paid customs duty as well as countervailing duty on its import of caprolactum monomer. This raw material was used by the company for manufacture of nylon yarn. In the course of processing of caprolactum monomer the company obtained at an intermediate stage of product called 'Polymer Chips,' also known as Nylon 6 Chips, which were consumed in the manufacture of the finished product, namely, nylon yarn. The question relates to the levy of excise duty on these polymer chips. The only question which now survives for our determination is whether these polymer chips can be classified under Item 15A of Schedule I to the Central Excises and Salt Act, 1944 as it stood during the period 1962-1972, since this period covers all the appeals. The assessee has described the process employed in its factory for polymerisation of caprolactum monomer. Once caprolactum is polymerised, it becomes nylon. In order to change the form of this substance and give it the required properties which enable textile yarn to be produced from it further processing is required in the course of which, at an intermediate stage, polymer chips are produced. The chips are obtained for the purpose of removing the remnant monomer so that the subsequent processing becomes more convenient. These chips which are otherwise called Nylon 6 Chips, are then dried, melted and spun into continuous filament by the process of extrusion. The spun filament undergoes further processing in order to get yarn in a saleable form. Polymer chips which are produced by the assessees companies have a relative viscosity of 2.22 to 2.30. The average molecular weight ranges from 10,000 to 18,000. These chips are suited only for the manufacture of textile fibres and are used exclusively for that purpose. With this background, let us examine whether these polymer chips fall under Entry 15A. Entry 15A was amended on 28th of February, 1964. We, therefore, are required to consider Entry 15A as it existed prior to 28-2-1964 and the Entry as it existed after 28-1-1964. I
(3.) ENTRY 15A as it existed prior to 28-2-1964 was as follows: "ENTRY 15A: PLASTICS, ALL SORTS: (i) Moulding powders, granules and flakes (thermosetting and thermoplastic).25% ad valorem (ii) Polythelene fixer, Layflat tubings and P. V. C. sheets (that is to say, polyviny chloride sheets), (iii) Not otherwise specified." The assessee contends that polymer chips or nylon 6 chips manufactured by the assessee are not known in the trade as plastics and hence they cannot be classified under Entry 15A which deals with plastics of all sorts.;