Central Excise - Dutiability of coloured granules - Clarification regarding - Central Excise - 93/10/92-CX.3

Central Excise - Dutiability of coloured granules - Clarification regarding F. No. 93/10/92-CX.3 Dated 13-7-1992 Government of India Central Board of Excise Customs New Delhi Subject : Central Excise - Dutiability of coloured granules - Clarification regarding. Representations have been received from the All India Plastics Manufacturers Association regarding the dutiability of coloured plastic granules when obtained from plain colourless plastic granules. It has been represented that field formations have taken a view that in terms of Chapter Note 6(b) to Chapter 39, conversion of plain plastic granules into coloured plastic granules would amount to manufacture as during the process of conversion, they are required to be melted and there is a change in the primary form. 2. The matter has since been examined by Board. The units colouring plastic granules use either plunger type or screw type of machines. The plain plastics granules are melted in order to facilitate the colouring. Though colourless plastic granules when melted change their primary form, they get re-converted into coloured granular form subsequently when the manufacturing process is complete. However, the fact remains that both the colourless as well as coloured plastic granules are in the granular form only. The conversion of primary form is at intermediate stage, the stage at which the goods are in molten form. Molten form has no shelf-life, not being capable of sold in the market, as on cooling, it will get converted into blocks of irregular shapes. Moreover, colouring or primary forms of plastics under Chapter 39 has not been taken as manufacturing process in the Chapter Notes of Chapter 39. Further, colouring does not bring into existence any new product with a distinct name character and use. Hence as per the definition of manufacture laid down by Supreme Court, activity of colouring will not amount to manufacture. 3. In view of the above, it is hereby clarified that the conversion of plain plastic granules into coloured granules does not amount to manufacture.