LexCHEMICAL AND FIBRES OF INDIA LTD. versus UNION OF INDIA AND ORS.
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1 ) \ CHEMICAL AND FIBRES OF INDIA LTD. v. UNION OF INDIA AND ORS. JANUARY 7, 1997 [A.M. AHMADI, CJ., AND SUJATA V. MANOHAR, J.] Excise Law : Central Excise a11d Salt Act, 1944: Item 15-A (as it stood prior to 28-2-1964). A B "Plastics''-Scope of-Polymer Chips or Nylon 6 Chips obtained in C course of processing of caprolactum monomer and consumed in the manufacture of Nylon yam-Held : such polymer chips or Nylon 6 Chips, not covered by te1111 "Plastics'~he tenn "plastics" was a commercial classiflcatio11 and not a scie11tific or a technical te11n--T71e temz had to be i11te1preted as understood in commercial parlance and not 011 basis of technical analysis of the composition a11d character of a plastic product-Inte1pretation of Statutes. D Item 15A(l)(ii) (After 1964 amendment)-Polymer Chips or Nylon 6 Chips obtained in course of processing of caprolactwn monomer and co11- sumed in the manufacture of nylon yarn-Held: such polymer chips or Nylon 6 Chips, not covered by tem1 ''A1tificial or jynthetic resi11s". E Words and Phrases : \ "Pfastics"-Meaning of-In the context of Item 15A (prior to 1964 amendment) in Sdi.l to Central Excises and Salt Act, 1944. ''Altificial or synthetic resillS"--Meauing of-Jn the context of Item 15A(l)(ii) after 1964 amendment) in Sch. I to Central Excises and Salt Act, 1944. F The appellant-company manufactured nylon yarn, a synthetic man- made fibre. For the manufacture of nylon yarn, the appellant-company G imported caprolactum monomer as raw material for which it paid customs -""" duty. In the course of processing of caprolactum monomer the appellant- company obtained at an intermediate stage a product called 'Polymer Chips', also known as" Nylon 6 Chips", which were consumed in the manufacture of the finished product, namely, nylon yarn. H 71 72 SUPREME COURT REPORTS [1997] 1 S.C.R. A The tiuestion before this Court was whether these polymer chips B could be classified under item 15A of Schedule I to the Central Excises and Salt Act, 1944 as it stood during the period 1962-1972. Entry 15-A was amended on 28-2-1964. On behalf of the appellant, it was contended that polymer chips or Nylon 6 Chips were not known in the trade as "plastics" and hence they could' not be classified under Entry 15A, which dealt with "plastics, all sorts". On behalf of the respondent, it was contended with reference to the C pre-amended Entry 15A that the chemical composition of polymer chips (Nylon 6 Chips) being similar to that of the material used in plastic industry, it conld be appropriately classified as a plastic; and that in the strict sense of the term, polymer chips or Nylon 6 Chips which were artificial or synthetic resins which fell in the category of polyamides in Item 15-A (l)(ii) (subsequent to the 1964 amendment). D Allowing the appeal, this Court HELD : 1.1. Entry 15A in Schedule I to the Central Excises and Salt Act, 1944 (prior to the 1964 amendment) does not use any scientific or ~ E technical term. It deals with "plastics, all sorts". The term 'plastic' is a commercial classification. When this kind of a term in a commercial sense is used in an excise entry which deals with marketable commodities which are manufactured and. which are subject to the levy of excise, that term has to be examined in the light of how it is understood in the trade. If, however, strictly technical or scientific words are used, the approach for .J F their interpretation may be different. [79-C] 1.2. Plastics as understood in the trade cover all kinds of synthetic materials. Th.ere is a distinction made in commercial parlance between materials used in the production of plastics and materials used in the G production of fibres, films or rubber although they may share certain structcral features. Affidavits from people in the trade, filed in the instant case, state that polymer chips of the kind manufactured by the assessee are not considered as plastics by those dealing in plastics. (80-G] Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Ako/a, [1962) H 1 SCR 279; CST, M.P. Indore v. Jaswant Singh Charan Singh, AIR (1967) ) y CHEMICAL AND FIBRES OF INDIA LID. v. U.O.I. 73 SC 1454 and Asian Paints India Ltd. v. Collector of Central Excise, (1988) A 35 ELTI, relied on. South Bihm· Sugar Mills Ltd. v. Union of India & Ors., [1968] 3 SCR 21 and Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCR 98, referred to Unwin v. Han
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