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TMI Blog1980 (10) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, refer to the facts and confine the discussion only to the extent it is relevant for the determination of this ground. 2. The company has a factory at Kota where it manufactures Nylon 6 yarn which is a commodity subjected to central excise duty under item 18 of the Central Excise Tariff. The basic raw material required in the manufacture of the Nylon 6 yarn is a substance known as "Caprolactum". But before the yarn can be obtained it is necessary for the caprolactum, which is a monomer, to be ploymerised. By the process of polymerisation the caprolactum which is the raw material, gets converted into polymer chips. One of the questions considered by the learned single judge was whether these chips could be described as "Plastics, not otherwise specified" under item 15A(iii) of the Tariff Schedule. 3. At this stage it needs to be mentioned that the Company was originally importing a commodity known as `Ultramid B.S.' from abroad. The Ultramid B.S. thus imported was 'utilised by the Company in the manufacture of Nylon 6 yarn. It is common ground that, commercially speaking, the ploymerised chips now obtained by the company and the commodity known as `Ultramid B.S.' whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.V.C. sheets (that is to say, polyvinyl chloride sheets); (iii) Not otherwise specified." 5. This contention of the department was refuted by the company and hence the writ petition praying for a writ of certiorari to quash an order dated 1st February, 1963 passed by the Collector of Central Excise, Delhi holding that the polymer chips were liable to duty at 20% ad valorem under the above item. 6. Several contentions were urged on behalf of the writ petitioner before the learned single Judge. The main contention was that the polymer chips did not fall within the description of the various items in entry 15A extracted earlier. The next contention of the petitioner-company was that even assuming that the polymer chips could be said to fall within the above item it would still not attract excise duty because the chips thus obtained were in such a condition that it was not possible to market them and in fact they were not being marketed. Relying upon the decision of Supreme Court in the case of South Bihar Sugar Mills Ltd. and Another v. Union of India and Another, 1978 E.L.T. (J 336) = AIR 1968 SC 922, it was contended that in order to be goods within the meaning of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it were of similar type to those imported by it under the trade-name of `Ultramid B.S.'. Prior to the commencement of the manufacture of polymer chips by the petitioner these very chips under the trade name of `Ultramid B.S.' were being imported by the petitioner. It was not relevant or material that the assessee company did not have technical and other resources to bring the polymer chips into the market. Once it is held that the polymer chips have been manufactured by the petitioner and that they are covered by item 15A there could be no escape from the conclusion that excise duty would be immediately attracted irrespective of the fact whether these polymer chips were actually brought into the market or whether the petitioner-company had the necessary resources to bring them into the market. This contention was, therefore, rejected. The learned single Judge also rejected the third contention put forward on behalf of the petitioner. He pointed out that the terms of Rules 9 and 49 would apply even in a case where excisable goods are removed from one part of the premises to another part of the premises for the purpose of further manufacture and it was not necessary that the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to be dismissed and the appeal allowed. But we are satisfied that the respondents cannot raise this preliminary objection successfully. The matter has been discussed at a very great length by the learned single Judge and we are in full agreement with him. Apart from other circumstances it has been pointed out that the allegations made in the writ petition that the respondents had acted under the general direction of the Central Board of Revenue which had already decided that the polymer chips produced by the present petitioner and similarly placed other companies was liable to excise duty under item 15A had not been denied in the reply affidavit filed by the respondents. In other words this was a case where the remedy of appeal and revision prescribed under the act was illusory. Moreover, the writ petition was heard and disposed of several years after the writ petition was filed and the aggrieved party also specifically gave up its right of appeal against the order of the Assistant Collector. Having regard to these circumstances we agree with the learned single Judge that the writ petition was not liable to rejection on the preliminary ground raised by the respondents. 10. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as using the Ultramid B.S. which it imported for the manufacture of Nylon yarn. But we are now concerned with the stage when the petitioner started manufacturing Nylon yarn from caprolactum having stopped the import of Ultramid B S. 12. The learned single Judge has come to the conclusion that there are two separate processes in the assessee's method of manufacture primarily on two considerations. The first is that the polymer chips obtained by the assessee are admittedly the same as the Ultramid B.S. which it imported previously. He has, therefore, held that the process of manufacture of polymer chips is independent of the process of manufacture of Nylon yarn and that there is no link between the two. The second consideration which has led the learned single Judge to his conclusion referred to above is that in the present case the polymer chips are manufactured, placed in containers and then sent to another part of the plant for the purposes of manufacturing Nylon yarn. He has held that the mere fact that both the processes are being carried on in one place or building would not result in the excisable polymer chips being exempt from duty when they are removed from one part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be done manually. In the present case no doubt the polymer chips were collected by the assessee and then transmitted to the hopper. But, this in our opinion, cannot be said to be a removal within the meaning of the Act and the Rules. The learned single Judge has pointed out that recently techniques have been discovered whereby polymer chips can be directly pumped from the dryer into the feeding hopper. He also agrees that the question whether there is a mere manual transmission or whether there is automatic mechanical transmission of the chips may not make much of a difference but he was inclined to the view that even if the polymer chips were pumped from the dryer direct to the feeding hopper yet they could be said to be removed from the place of the manufacture and, therefore, liable to excise duty. With respect we are unable to agree with the conclusion of the learned single Judge. As pointed out in Modi Carpet (supra) the expression "place of manufacture" has to be understood in the context of the factory premises or the parts thereof specified under Rule 47. It is not sufficient for the excise authorities merely to say that at some stage in the process of manufacture an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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