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TMI Blog1986 (3) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... he CET), by recycling the waste. The dispute in the present case is as to whether the wastes generated in the course of manufacture of polyester fibre/tops from duty paid wastes have to suffer duty again at the time of clearance. The appellant s contention was that since the waste which was used in the manufacture of polyester fibre/tops had suffered duty, the waste arising during the manufacture of fibre/tops from such duty paid waste was not liable to be charged to duty again since the input was waste and the output also was waste. After due process, the Assistant Collector of Central Excise, Madras, by his Order-in-Original dated 12-9-1980, held that duty should be charged at the appropriate rate on the waste arising during the course of manufacture of polyester fibre/tops out of duty paid waste. The matter was pursued in appeal but without success. In his Order-in-Appeal dated 8-4-1981, the Appellate Collector of Central Excise, Madras, upheld the Assistant Collector s finding that the duty paid waste used in the manufacture of fibre/tops had lost its identity because of admixture with other raw materials and that the waste arising during such manufacture was fresh waste. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on given to fibre and tops in terms of notification No. 37/38. The counsel also referred to the Tribunal s order in Collector of Central Excise, Aurangabad v. Anil Chemicals Pvt. Ltd. Aurangabad - 1985 (21) E.L.T. 889, in which it was held that mere improving quality or purity did not amount to manufacture or creation of new and different goods. Even if there had been processing and manufacture, if the result is production of the same goods, even of a higher purity, then the manufacture/processing cannot have the effect of making the purer product liable by that fact alone to excise duty. Reliance was also placed on the Tribunal s decision in Kolhapur Steel Limited v. Collector of Central Excise, Pune - 1983 (2) ETR 692; wherein it was held that fresh melting scrap and the old scrap from which it is manufactured both fell under item 26 and, therefore, there has not been production of a new article satisfying the definition of manufacture in Section 2(f) of the Central Excises and Salt Act. Relying on the aforesaid decision, Dr. Gauri Shankar submitted that there was no justification to hold that the resultant waste was a new product liable to be charged to excise duty again under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no other item in the Tariff to cover the product. But a different picture emerges when we look at the technical note entitled Use of MEG in recycling polymer waste written by Dr. Subbaraman. The process of manufacture of resultant waste is described as follows :- The process for manufacturing polyester staple fibre by recycling non-cellulosic polyester waste is a two stage process involving the following steps: (1) Glycolysis : The waste polymer is convered into the monomeric stage/prepolymer stage by reaction with monoethylene glycol. In chemical parlance the polymer waste (PET) becomes BHET. The chemical reaction is : X / N HOCH 2 CH 2 O(OC - - CO-OCH 2 C H 2 OH)N + (X X / N ) HO-CH 2 CH 2 -OH EGnPET (BHET) (1) (2) Repolymerisation : - The polyester of average degree of polymerization (n-90) about 90 is thus brought into the monomeric stage and then all dirt is filtered off before repolymerising it to a textile grade polymer within n= 90. In chemical parlance, BHET is again converted to PET (Polyethyleneterephthalate). The chemical reaction is - x / n HOH 2 CH 2 CO-(OC - - CO-OCH 2 CH 2 O)H + (X - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al noted that there were separate entries in the CET for caprolactum (14 AA) and nylon waste (18 IV). Therefore, the recovery of caprolactum from nylon waste was manufacture . For this, it relied on the Delhi High Court judgment in Hyderabad Asbestos Cement Products v. Union of India - 1980 E.L.T. 735 to the effect that when the legislature has treated an article as manufacture, the argument is not open that it is not a manufacture . It was further held by the Tribunal that the recovered caprolactum would be liable to duty under item 14AA. 10. In the Nirlon case, the process of manufacture may be briefly set out as (polymer)(polymerisation)(duty paid) *14AA, CET) Caprolactum (14AA CET) 11. In the present case, the process of manufacture may be set out briefly thus :- duty paid PET (polyethyleneterepthalate) (polymerization) (18-IV CET) Polyester fibre (18-1, CET) Polyester waste (polymer) (18-IV, CET) 12. Though the sequence of reactions is different, the ratio of the decision in the Nirlon case clearly applies. In the present case too, there is undoubtedly manufacture within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n did not require that the fibre and tops should be manufactured exclusively out of duty-paid waste and that no other material should be used along with duty-paid waste. The court held that even if the petitioners had used MEG as an assisting agent, they could not be deprived of the benefit of the exemption under notification No. 37/78. The issue before us is different. It is not the dutiablility of the fibre and tops manufactured out of duty-paid waste but the dutiability of the waste arising during such manufacture. The Madras High Court judgment has, therefore, no application to the present case. 16. The next decision relied on by Dr. Gauri Shankar is that of this Tribunal in the Anil Chemicals (P) Ltd. case 1985 (21) E.L.T. 889 (supra). Prilled ammonium nitrate (the goods in that case) is obtained by concentrated ammonium nitrate solution being sprayed downward in a large tower where the droplets are cooled by upward flow of air to form spherical prills which are collected at the bottom of the tower. The surface of the prills is coated with 2.5 to 3% of activated clay or a diatomacecus earth conditioner. The Tribunal held that concentrating a product would not, by that fact a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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