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TMI Blog1996 (6) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture and captive consumption of Resin in a continuous and integrated process. The first two notices were dropped on account of bar of limitation. The appellant, besides raising plea of limitation, contended that the process adopted is a continuous, integrated and uninterrupted process taking place in a reactor, that in the course of the process no identifiable goods come into existence which is capable of removal, that the Resinous substance which may come into existence during the chemical reaction in the reactor is not capable of being identified as goods and is not capable of removal and is not dutiable. It was further contended that the mass of Resinous substance which emerges in the reactor, if removed, would not be usable as such and is not known to the market and the same is not capable of being sold or marketed as such. The Resinous mass is full of impurities and is not capable of being sold without further processing. In the written submission filed before the Collector, it was stated that Resin is not manufactured or captively consumed, that Resin in a chemical sense came into existence in the sense that there is presence of Resin in a chemical sense in the reactor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercially known in the market. Accordingly he held that the intermediate product is goods liable to excise duty. 5. Learned counsel for the appellant took us through the show cause notice, the reply and the affidavits relied on and pointed out that the expert was made available for cross-examination but there was practically no cross-examination conducted and that the expert opinion stood unchallenged and unrebutted. It is stated that the appellant did not produce the deponents of the other three affidavits for cross-examination but undertook to do so if deemed necessary and appellant was not required by the Collector to produce them and hence their affidavits also stood unrebutted. The evidence, it is contended, clearly showed that the intermediate product is not Resin as known to Chemistry or to the trade or market but is a brown viscous sticky viscous mass which contained solvent and chemicals and there was also presence of Resin, that this Resin cannot be separated, that the Resinous mass is not Resin , that the Resinous mass is of no use to and cannot be used by any one other than the appellant and is not marketable nor known commercially. It is contended that the Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or example, collodions, celluloid) ; vulcanised fibre; hardened proteins (for example, hardened casein and hardened gelatin); natural resins modi- fied by fusion (run gums) ; artificial resins obtained by esterification of natural resins or of resinic acids (ester gums) ; chemical derivatives of natural rubber (for example, chlorinated rubber, rubber hydro-chloride, oxidised rubber, cyclised rubber) ; other high polymers, artificial resins and artificial plastic materials, including alginic acid, its salts and esters; linoxyn. (2) Articles of materials described in sub-item (1), the following, namely :- Boards, sheeting, sheets and films, whether lacquered or metallised or laminated or not ; lay flat tubings not containing any textile materials. Fifty per cent ad valorem (3) Polyurethane foam. Seventy-five per cent ad valorem. (4) Articles made of polyurethane foam. Seventy-five per cent ad valorem. Explanation II . - In sub-item (1), condensation, polycondensation , polyaddition, polymerisation and co-polymerisation products are to be taken to apply only to goods of a kind produced by chemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in common parlance or in the commercial world or trade circles. It must be given its popular meaning. It should not be understood in any technical or scientific sense. [Indian Cable Co. Ltd. v. Collector of Central Excise, Calcutta - 1994 (74) E.L.T. 22 (SC)]. A different approach is necessary in the case of words of a technical or scientific character. Such words must be construed according to that which is its primary meaning, namely, its technical or scientific meaning (STC, Indore v. J. Singh - AIR 1967 SC 1454). The High Court of Bombay which considered old T.I. 15A in Chemicals and Fibres India Ltd. v. Union of India and others 1982 (10) E.L.T. 917, indicated that it refers to a class of products and to chemical processes. With reference to item 15A(1) it was observed that the nature of products referred to therein are highly technical and scientific in character and, therefore, the words used therein will have to be given only their technical or scientific meaning. The processes referred to are not capable of being construed in a popular sense, but can be construed only in a scientific or popular sense. But we find on an examination of the item that it also uses expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in predetermined proportions are added to give required flow and rate of evaporation for the liquid mass, after cooling below 50oC the product is further modified with a special cross linking catalyst appropriate to the ingredients used and the final product obtained in Kettle II is checked for viscosity and other properties, filtered and packed. He saw the sample removed from Kettle I. It was in the form of yellowish/brown viscous sticky mass. According to him, the manufacturing process of wire enamels is a continuous and uninterrupted process and the yellowish brown viscous sticky mass is not physically removed but flows into Kettle II for further processing. He is definite that the Polyester Resin generated in Kettle I is not isolated. 12. Dealing with the question whether the product generated in Kettle I is Resin, he stated that for a product to be Resin it must be identifiable by way of its melting/softening points, chemical properties like acid value, saponification value, iodine value and molecular weight. The sticky mass in Kettle I is a solution/dispersion in cresylic solvents and cannot be characterised as Resin as it is generally known by any of its properties. Sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vents. Item 15A(1) specifically refers to Polycondensation products, whether or not modified or polymerised, and whether or not linear . In view of the opinion of Dr. S. K. Potnis that the product in Kettle I is the result of Polycondensation, it can be said that it is a Polycondensation product. But in so far as Polycondensation product is concerned, Explanation II has also to be taken into consideration. The Explanation states, inter alia, that Polycondensation is to be taken to apply only to goods of a kind produced by chemical synthesis answering one of the descriptions in clauses (a), (b) or (c). According to the SDR, it is clause (a) which is attracted in this case. Clause (a) refers to artificial plastics, including artificial resins . The words Polycondensation products used in item 15A(1) are no doubt technical or scientific words and are not words in common parlance and, therefore, require to be understood only in the technical or scientific sense. In that view, the product obtained in Kettle I, as we have already indicated, is Polycondensation product. But by virtue of Explanation II, Polycondensation can apply only to goods answering description artificial Resins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct, there are no uniformly accepted specifications and testing standards and polyesters which are artificial Resins do not have any fixed uniform specification and they are made according to the requirements of the use to which they have to be put. These products, it was indicated, could not have been described individually and have, therefore, been described with reference to the category into which they chemically fall and with reference to the processes from which they result. The Court also explained that Terylene, Decron, Teron and other names are trade names. But that cannot be said of the word artificial Resins . It is not a trade name, but it is a product known in the market and known commercially. Therefore, the decision is of no assistance to the department. 15. Therefore, in view of Explanation II(a) to Item 15A, the enquiry should be directed to find out whether Polycondensation product in this case is produced by chemical synthesis and answers the description artificial Resins . We have referred to the fact that the impugned order refers to the product as artificial Resin, without support of any material and merely on the basis of the result of earlier chemical te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, that separation of Resin would be possible only through further elaborate processes and it can be used only for wire enamels or insulating varnishes and for no other purpose and that it cannot be used for wire enamel by simple dilution because it does not contain required amount of specific solvent mixture and necessary cross-linking agents and it is not a product of commercial use and not marketable goods has not been rebutted by the Department. Dr. S.K. Potnis is an expert with high academic qualifications, considerable expertise and intimate inter-action with the Industry. His evidence is supported by the affidavits of two traders who certainly are familiar with the trade and trade practices. Their evidence also stands unrebutted. It is not marketable commodity and hence not excisable. 18. The view receives support from the decision of the Supreme Court in Moti Laminates Pvt. Ltd. v. Collector of Central Excise - 1995 (76) E.L.T. 241. The manufacturer in that case was engaged in the manufacture of laminated sheets in the course of which a semi-processed mixture was produced and the same was captively consumed. The mixture was a solution of Resin and water and was not full ..... X X X X Extracts X X X X X X X X Extracts X X X X
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