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TMI Blog2014 (2) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a hard material . The meaning given in the same dictionary for ‘granule’ is ‘a small compact particle’. The difference in meanings is very thin and vague. So the basis of ‘strict interpretation’ of notification canvassed by Revenue is based on such vague difference. The opinion of Professor of High Polymer Engineering Laboratory, Chemical Engineering Department, IIT Madras states that these words are used interchangeably - No authoritative text showing any difference between Nylon Chips and Nylon Granules has been produced. A search on internet shows similar physical forms for goods marketed as ‘Nylon Chips’ and as ‘Nylon Granules’ - Decided in favour of assessee. - Appeal Nos.C/349/2004 & C/260/05 - FINAL ORDER No.40102 & 40103/2014 - Dated:- 11-2-2014 - Shri P.K. Das and Shri Mathew John, JJ. For the Appellant : Shri N. Viswanathan, Advocate For the Respondent : Shri P. Arul, Superintendent (AR) JUDGEMENT Per Mathew John; 1. There are two appeals being considered in this proceeding. The issue involved in both the appeals are the same but relate to different periods. Therefore both the appeals are taken up together for disposal. 2. The appellant is a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be made between a synthetic resin and a plastic. The former is the polymer itself, whereas the latter is the polymer plus such additives as fillers, colorant, plasticizes, etc. Thus the resins are different from plastics and Nylon chips cannot be considered as same as Nylon resins. 10. As per Note 6 to Chapter 39, the expression primary forms applies only to the following forms: a. Liquids pastes,including dispersions (emulsions and suspensions) and solutions b. Blocks of irregular shapes,lumps, powders, granules, flakes and similar bulk forms. 11. As per the book "Textiles Fiber to Fabric" by Bernard P.corbman Nylon fibre can be made in several ways. The most important of these methods is the melt process that, depending upon the denier (or decitex) of the filament desired, generally uses either the grid or extruder spinning technique. In grid spinning, nylon flakes are used and in extruder spinning chips are used (to manufacture heavier yarns). 12. Thus Nylon can be in various forms and nylon fibre can be manufactured using different methods depending upon type of form, whether it is a chip or flake. 13. Thus it is obvious that chips are different from granul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther submitted that the supplier had set up a factory in India for manufacturing "Nylon 6". When classificationof the goods manufactured was in dispute before the Delhi High Court as reported in JK Synthetics Vs CCE Delhi 1985 (21) ELT 410 (Del.), the department filed an affidavit to the effect polymer chips are obtained by the polymerisation of the caprolactum and are known as 'Polymide Resins' and that they can further be used as raw material for manufacture of different plastic articles by using special type of extrusions and injection moulding techniques. 4.3 He points out to the affidavit as stated in para 34 of the judgement which is reproduced below :- 34. A further affidavit of Mr. K.C. Joshi, Assistant Collector, Central Excise, Ajmer, dated 15-7-1965, was filed by the respondent. It is admitted that the petitioner imported Ultramid BS which is the name of the product corresponding to the Polymer chips which are now being manufactured by the petitioner. It is stated that the Polymer chips have Thermoplastic properties and that Ultramid BS can be used for manufacture of textile fibres as well as the plastic material for manufacture of articles made of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly shape. He submits that end-use certificate cannot be the ultimate proof about classification of the products imported. He relies on para-9 of the decision of the Tribunal in Sujana Steel Ltd. Vs CCE Hyderabad - 2009 (243) ELT 711 (Tri.-Bang.). He produces an extract "Nylon Feedstocks Fibers Market Report" which shows that prices in various countries like, Asia, America, Europe, Asia Pacific and North America and there is distinction between nylon chip and other items namely Nylon 6 chip N6, 6 chip and Nylon filament. He relies on paras 30 and 31 of the decision in the case of Chemical and Fibres of India Ltd. Vs UOI - 1997 (89) ELT 633 (SC). 5.3 Ld. AR submits that the expression used in a notification has to be interpreted strictly and the goods imported do not fit into the description of "chips". He submits that in common parlance test, the description goods fail to satisfy the definition of "chips". 6. In counter, Ld. advocate submits that words "chips" is not defined either in the tariff or in the notification. Heading 3908.10 covers polyamides in primary form. Granule isa primary form and there is no dispute that the goods were covered under heading 39.08 of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reaking a hard material. The meaning given in the same dictionary for granule is a small compact particle . The difference in meanings is very thin and vague. So the basis of strict interpretation of notification canvassed by Revenue is based on such vague difference. The opinion of Professor of High Polymer Engineering Laboratory, Chemical Engineering Department, IIT Madras states that these words are used interchangeably. The paper submitted by the Ld. AR showing Nylon Feedstocks and Fibre Market Report also does not show prices for chips vis-a-vis Resin or Chip vis-a-vis Granules for the same geographical area which fact confirms the opinion of the said Professor that these words used vary from country to country. No authoritative text showing any difference between Nylon Chips and Nylon Granules has been produced. A search on internet shows similar physical forms for goods marketed as Nylon Chips and as Nylon Granules . Considering all these aspects we find no merit in the argument of Revenue to deny the exemption to the goods in question. Therefore we set aside the impugned order and allow the appeal. (Submissions recorded in court on 04-12-13 and order pronounced o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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