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TMI Blog1994 (9) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... to 28-6-1977. The Assistant Collector of Central Excise, by his order dated 28-7-1978, held that the PVC compound in the form of granules produced by the asssessee were exigible to duty for the period from 18-6-1977 to 28-6-1977, under Rule 10 of Central Excise Rules, 1944. He allowed set-off in respect of the duty paid on PVC resins and used in the production of PVC compound. In appeal, the Appellate Collector of Central Excise, by his order dated 28-8-1979, held that the appellant manufactured PVC compound (granule) for insulation of their products, electric wires and cables, and the resultant PVC compound is a new product having different use than that of PVC resins and the processes undertaken by the appellant amount to manufacture within the meaning of Section 2(f) of the Act. He held that PVC compound would fall under sub-item (ii) of Item 15A(1) and excise duty is accordingly leviable. In Second Appeal, filed by the assessee, the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi, by a majority held that the appellant purchased PVC resins and what they produced is PVC compound or moulding granules, and though, no polymerisation or co-polymerisation results nor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranules produced out of duty paid PVC resins is exigible to excise duty. On the other hand, counsel for the revenue Sri Vellapalli contended that the PVC compound in the form of granules produced from out of the duty paid PVC resins, is a distinct and different product in the commercial world and since it is a different commercial product, it is implicit therefrom that it is "marketable". It was further argued that the goods produced by the appellant, namely, PVC compound (granules) cannot be said to be the same goods as the PVC resins purchased by the assessee on which duty was paid. It is a distinct and different product in the commercial world and is exigible to excise duty as found by statutory authorities. 3.We were referred to a few standard books to highlight what is meant and understood by "plastics" and "resins" in the commercial world and whether the PVC compound (granules) in the instant case, after having undergone the process as found by the Appellate Tribunal, is or is not a distinct and different product in the commercial world attracting levy of excise duty though removed for captive consumption. Our attention was invited to the New Encyclopaedia Britannica Vol. 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the polymer molecules does not undergo change. We are of the opinion that there is a definite process of manufacture involved in the subject process................... It is not disputed that PVC resin and PVC compound or moulding granules are not one and the same thing. We have seen that the conversion of PVC resing into PVC compound involves the addition of fillers, plasticizers, stabilizer and lubricant, the ingredients being intimately and homogeneously mixed with the aid of heat and machines into a sheet which is then broken up into granules or chips. Again, the two products are known by different names. What the appellants purchase is PVC resin and what they manufacture is PVC compound or moulding granules. It is in evidence, as seen from the Chemical Examiner's Notes, which have been referred to by the appellants, that some of the physical and mechanical properties of PVC resin are greatly modified by its conversion to PVC compound though, admittedly, no polymerisation or co-polymerisation results nor any changes in the structural identity of the polymer molecules." It is on the basis of the aforesaid finding the Tribunal held that the PVC compound produced by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the rival views so expressed by the members of the Tribunal, since the matter requires a remit, for other reasons. But we would like to point out that in construing the relevant item or entry, in fiscal statutes, if it is one of everyday use, the concerned authority must normally construe it, as to how it is understood in common parlance or in the commercial world or trade circles. It must be given its popular meaning. The meaning given in the dictionary must not prevail. Nor should the entry be understood in any technical or botanical or scientific sense. In the case of technical words, it may call for a different approach. The approach to be made in such cases has been stated by Lord Esher in Unwin v. Hanson (1891) 2 QB 115, at 119 thus : "If the Act is directed to dealing with matters affecting everybody generally, the words used have the meaning attached to them in the common and ordinary use of language: if the Act is one passed with reference to a particular trade, business, or transaction, and words are used which everybody conversant with that trade, business or transaction knows and understands to have a particular meaning in it then the words are to be construed as h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 493 (SC) = (1993) 3 SCC 488. At page 511, Venkatachaliah, J., as he then was, stated the law thus : "The prevalent and generally accepted test to ascertain that there is `manu- facture' is whether the change or the series of changes brought about by the application of processes take the commodity to the point where commercially, it can no longer be regarded as the original commodity but is, instead, recongnised as a distinct and new article that has emerged as a result of the processes. The principles are clear. But difficulties arise in their application in individual cases. There might be borderline cases where either conclusion with equal justification be reached. Insistence on any sharp or instrinsic distinction between `processing' and `manufacture', we are afraid, results in an oversimplification of both and tends to blur their interdependence in cases such as the present one." We need not elaborate on this aspect of the case since, according to us, finding on another important aspect necessary to sustain the levy of excise duty, is totally absent in this case and the entire matter requires reconsideration by the Tribunal. 8.Counsel for the appellant Shri A.K. Gang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industan Polymers v. Collector - 1989 (43) E.L.T. 165 (SC) (5) Collector of Central Excise v. Ambalal Sarabhai Jt - 1989 (3) SC 341 = 1989 (43) E.L.T. 214. (6) Union Carbide v. UOI - 1986 (24) E.L.T. 169 = 1986 (SC) JT 453 (7) A.P. Electricity Board v. Collector of Central Excise - 1994 (70) E.L.T. 3 (SC) = JT 1994 (1) SC 545. 13.In the latest decision in A.P. State Electricity Board v. CCE, Hyderabad, (1994 (70) E.L.T. 3 (SC) = JT 1994 (1) SC 545), one of us (B.P. Jeevan Reddy, J) speaking for the Bench succinctly stated the law thus at pages 549 & 550 : "........Marketability is an essential ingredient in order to be dutiable under the Schedule to the Act...... The `marketability' is thus essentially a question of fact to be decided in the facts of each case. There can be no generalisation. The fact that the goods are not in fact marketed is of no relevance. So long as the goods were marketable, they are goods for the purposes of Section 3. It is not also necessary that the goods in question should be generally available in the market. Even if the goods are available from only one source or from a specified market, it makes no difference so long as they are available for pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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