TMI Blog1983 (10) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... eard as Appeals, pursuant to the provisions in Section 35(P) of the Act. They are Appeal Nos. 1449, 1489, 1491, 1493, 1494. 2. Identical issues arising in all the five Appeals are - (a) Whether, in the facts and circumstances of the case, recovery of Caprolactum from wash water constituted manufacture of Caprolactum? (b) If so, was it classifiable under Item 14AA of the 1st Schedule to the Act. (Adjudication Order No. 1274) and accordingly assessable to duty during the periods between - (i) 23-3-1978 and 31-5-1978 (Adjudication Order No. 2712); (ii) 1-6-1978 and 31-7-1978 (Adjudication Order No. 2709);] so that their refund applications do not maintain; and they are further liable to pay differential duty on such Caprolactum during the periods between - (iii) March, 1978 and July, 1978 (Adjudication Order No. 4946); (iv) August, 1978 and March, 1979 (Adjudication Order No. 4950)? (c) Was the Notification No. 47/77, dated 1-4-1977 applicable to the facts of each of the Appeals? (d) Was the show cause notice for the review in order? Our decision - herein governs all other Appeal Nos. 1489, 1491, 1493, 1494 as well. 3. The u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se any of the Appeals allowed involved both the issues, relief is limited to that part which pertains to recovery of Caprolactum from wash water; (Adjudication Orders 4946 and 4950); (e) a single notice to show cause as to why the order of the Appellate Collector should not be reviewed in so far as it related to Caprolactum recovered from wash water, (i.e. adjudication orders nos. 1274, 2712, 2709, 4946 and 4950 the last two in the part relating to wash water), was issued by the Appellant on 19-5-1981, in exercise of the powers vested under Section 36(2) of the Act as it then read; on transfer to the Tribunal, they were registered as Appeal Nos. 1489, 1491, 1493, 1494 and 1449; 4. The crux of the notice to show cause, was that the Govt. of India was tentatively of the view that - (a) the Appellate Collector having held that recovery of Caprolactum from waste amounts to manufacture of Caprolactum could not have held otherwise in the case of recovery of Caprolactum from wash water, the reasons being the same; (b) the process of recovery of Caprolactum from wash water also results in the production of a commodity with a distinct name, character and use; (c) the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1490 of 1981 relating to Caprolactum recovered from waste, (not reproduced herein in the interests of brevity), learned Senior Counsel for the Respondent urged, that - (a) the findings of fact by the Appellate Collector in relation to Caprolactum recovered from wash water to the effect that the Caprolactum content in wash water did not lose its identity was neither disputed nor put in issue; (b) just because it was held that Caprolactum recovered from waste involved manufacture , it does not follow that Caprolactum is manufactured when recovered out of wash water as well; the processes of recovery were entirely different; (c) since there was, indeed, no basis for the show cause notice for Review, or the basis or the foundation for the notice, such as it is, is fallacious reasoning, the Appeal resulting from the notice for review should be dismissed; (d) it should be also dismissed for want of any positive evidence contrary to the finding of the Appellate Collector; (e) wash water is not an excisable marketable commodity. (Reliance on Union of India v. D.C.M. (A.I.R. 1963 S.C. 791); (f) The Trade Notice No. 150/75 relied upon by the Appellate Collector affir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 492/81 (relating to recovery of Caprolactum from waste), that it is commercially known to be goods, with a distinct name, character and use. It cannot be forgotten that the test of marketability to adjudge manufacture is of no relevance only in cases where a product indisputably falls under one or the other of Items 1 67 of the 1st Schedule [Union of India v. H.U.F. Ramlal Mansukhrai - A.I.R. 1973 S.C. 2333 = 1978 E.L.T. (J 389)] and not if there is any doubt or debate regarding its specific inclusion in those items or in the residuary Item 68. Marketability is the very crux more often than not when a product is sought to be brought within the ambit of the residuary Item 68. Otherwise, the product is not goods in the first place much less excisable goods (Section 3 of the Act). (b) And the onus to prove marketability and consequently manufacture in the absence of a specific entry in the 1st Schedule rests on the Appellant. That was the ratio of the Supreme Court in the D.C.M. case (A.I.R. 1963 S.C. 791 = 1977 E.L.T. 199). The distinction between the ratio of the D.C.M. case in A.I.R. 1963 S.C. 791 and the decision in A.I.R. 1973 S.C. 2333 (referred to supra) is obvious. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess will then be mixed with virgin Caprolactum. (d) In his second affidavit dated 22-8-1983, he gave the properties of the recovered lactum vis-a-vis lactum oligomers consisting of only a few units of lactum monomer described as dimer and trimer etc. They appear to be substantially different. (e) Now Oligomers are formed during the process of polymerisation and require to be eliminated (Encyclopaedia of Polymer Science Technology p. 366-Vol. 10). Although not mentioned in the aforesaid affidavits, they are present in wash water. These low molecular lactum oligomers are removed from the polymer by means of extraction with water, in which case the obtained extract contains about 75 to 80% monomers and 20 to 25% oligomers . (Organic Polymer waste reclaiming Encyclopaedia by Marshall p. 48). (f) If, therefore, the wash water contains oligomers apart from a small percentage of unreacted caprolactum, the elimination of the former is essentially by a process of extraction, may be by steam heating and application of vacuum. It is not merely a process of separation of the unreacted Caprolactum from wash water by a process of elimination of the oligomers resulting fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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