TMI Blog1997 (1) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... , entitled to succeed. In favour of assessee. - 3495 of 1982 with 3507 of 1982 - - - Dated:- 7-1-1997 - A.M. Ahmadi, CJI and Mrs. Sujata V. Manohar, J. [Judgment per : 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Britannica, Volume 18, while dealing with "plastics" has this to say on the subject : "The articles called "plastic" generally require shaping by heat during their fabrication by moulding or extrusion. Since the newer synthetic products can frequently be used inter-changeably as coatings or as mouldings, the distinction between resins and plastics become less pronounced. Moreover modern technology shows that the materials which are designated as rubber, fibres, resins and plastics are of a similar molecular structure and by appropriate chemical and physical treatment, it is possible to interconvert any of these materials. It follows that certain structural features are common to all these products and being common they relate to similarity in physical properties between materials which are not necessarily chemically related. It might be argued that rubber is a plastic, since it can be fabricated by procedure similar to those employed in moulding plastics; but rubber is not generally considered to be a part of the plastics industry ............... Similarly the fibre industry is considered to be independent of the plastics industry and here again the same raw-materials, polyam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y `plastic' has been described as under : "Plastic - (1) a substance that at some stage in its manufacture or processing can be shaped by flow (as by application of heat or pressure) with or without fillers, plasticizers, rainforcing agents, or other compounding ingredients and that can retain the new solid, often rigid, shape under conditions of use; (2) any of a large group of materials of high molecular weight that usually contain as the essential ingredient a synthetic or semi-synthetic organic substance made by polymerization or condensation (as polystyrene or a phenol- formaldehyde resin) or derived from a natural material by chemical treatment (as nitrocellulose from cellulose), that are molded, cast, extruded, drawn, or laminated under various conditions (as by heat in the case of thermoplastic materials, by chemical condensation in the case of thermosetting materials or polyesters, or by casting during polymerization of monomers) into objects of all sizes and shapes including films and filaments." 12.Our attention is also drawn to the American Society for Testing Material Standard which makes a distinction between "nylon" and "nylon plastics" - including the former u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otanically they may fall in that category, because betel leaves are not commonly understood as vegetables. 16.Again in the case of The Commissioner of Sales Tax, Madhya Pradesh, Indore v. M/s. Jaswant Singh Charan Singh - (AIR 1967 S.C. 1454) the Court held that the Entry "Coal" under the Madhya Pradesh General Sales Tax Act would cover charcoal also. The Court said that while "Coal" is technically understood as a mineral product while charcoal is manufactured by human agency from products like wood and other things, it is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had, not to the scientific or the technical meaning of such terms, but to the meaning attached to them by those dealing in them. [See in this connection South Bihar Sugar Mills Ltd. etc. v. Union of India Ors. - (1968) 3 SCR 21 and Dunlop India Ltd. v. Union of India Ors. - (1976) 2 SCR 98. 17.In the case of Asian Paints India Ltd. v. Collector of Central Excise - 1988 (35) E.L.T. 3, Sabyasachi Mukharji J. (as he then was) has summed up the rule of interpretation in the following words : "It is well-settled that the commercial meaning has to be given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, as amended after 28-2-1964 was as follows : "15A. ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC MATERIALS, AND ARTICLES THEREOF. Twenty percent ad valorem. (1) Artificial or synthetic resins and plastic materials in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, the following, namely :- (i) Condensation, Poly-condensation and Poly-addition products, whether or not modified or polymerised; including phenoplasts, Aminoplasts Alkyds, Polyurethane, Polyallyl Esters and other Unsaturated Polyesters; (ii) Polymerisation and Copolymerisation products including Polyethylene and Polytetrahaloethylene, Polyisobutylene, Polystyrene, Polyvinyl Chloride, Polyvinyl acetate, Polyvinyl Chloroacetate and other Polyvinyl derivatives, Polyamides, Polyacrylic and Polymethacrylic derivatives and Coumarone-Indene resins; and (iii) Cellulose acetate (including di-or tri-acetate), Cellulose acetate butyrate and Cellulose propionate, Cellulose acetate-propionate, Ethyl cellulose, and Benzyl cellulose whether plasticised or not, and plasticised Cellulose nitrate. (2) Articles made of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er industries. 23.The question, therefore, which we have to decide is whether artificial or synthetical resins should be confined only to those resins which ultimately produce material having plastic qualities or whether they would include within their scope other kinds of material derived by similar processes which are described in sub-clauses (i), (ii) and (iii), but which are suitable for use in other kinds of industries such as rubber industry, textiles or films. 24.Are the words "artificial or synthetic resins" interchangeable with or linked with the words "plastic material" ? Brage Golding in his treatise on "Polymers and Resins", in Chapter I which deals with introductory concepts and definitions, after stating that it is unfortunate that there are no explicit definitions of the words resins and plastics, the meanings being understood by those who use them, has attempted to define these expressions as follows : "Probably the closest one can come to a definition of resins is that it is a solid or semi-solid, natural or synthetic organic substance of relatively high molecular weight (not necessarily a polymer) which exhibits no sharp melting point, breaks with a conchoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e condensation and the relatively recent epoxy resins, vinyl polymers such a polystyrene and poly methyl methacrylate and condensation polymers of the polyamide or polyester class. Most of the application of the term `resin' is to those linear or cross-linked (or cross-linkable) polymers that are used in molding, casting, or extruding operations and in surface coatings; and, to most cross-linked (or cross-linkable) polymers, no matter what the end use (as in adhesives, textile finishes, etc.). Thus poly methyl methacrylate and various polyamides, both essentially linear polymers, are termed molding resins when directed to a molding end use. However, polyamides would not be termed resins by the synthetic fibre industry in their usage of the material." (underlining ours) In other words, "synthetic resin" is a term used in plastic industry and possibly in other industries, but not in the textile industry to refer usually to unfabricated material out of which the end product is made. 28.While the first three descriptions/definitions of synthetic resins emphasise the plastic quality of synthetic resins, the last description clearly brings out the fact that in the synthetic fibre ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is as follows : "In the broad sense of the term polyester resins include many types of resinaous condensation products and collectively represent a broad and expanding field in the plastics industry........ As indicated in other section, alkyd resin are basically polyster. Saturated liner polyester resins can be film or fibre forming material, for example, polyethelene, terephathalate". This passage, however, does not assist us in the sense that it does not tell us what the terms "synthetic resins" or "artificial resins" generally refer to. It does, however, indicate that the term "polyester resin" represents the broad and expanding field in the plastic industry and satured liner polyester resins can be fibre forming. From the passage it is not clear whether the latter are commonly referred to as synthetic resins or not. By and large, therefore, one can come to the conclusion that the term `artificial and synthetic resin' is used in the plastic industry to refer to various materials derived by the processes which are referred to sub-clauses (i), (ii) and (iii) of Entry 15A for the purpose of producing material or products which are suitable in the manufacture of plastics. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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