http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: CHEMICAL AND FIBRES OF INDIA LTD. COLLECTOR OF CENTRAL EXCIS

       Vs.

RESPONDENT: UNION OF INDIA & ORS.  M/S. J.K. SYNTHETICS LTD., KOTA NIRLO

DATE OF JUDGMENT:       07/01/1997

BENCH: A.M. AHMADI, SUJATA V. MANOHAR

ACT:

HEADNOTE:

JUDGMENT:                             WITH CIVIL APPEAL NO. 3507 OF 1982                             WITH             TRANSFERRED CASE NO.........OF 1996    (Arising out of Transfer Petition (C) No. 188 of 1983)                       J U D G M E N T Mrs. Sujata V. Manohar, J.      These appeals  and the transferred appeal rise a common question: whether polymer chips manufactured by the assesses and used  by them  in the  manufacture of  nylon yarn can be classified, for  the purpose  of levy  of excise duty, under Item 15A  in Schedule I to the Central Excises and Salt Act, 1944, as  it stood  during the  period 1962 to 1972. For the sake of convenience we are period 1962 to 1972. For the sake of convenience  we are  setting out the facts in relation to the transferred  appeal pertaining  to M/s. Nirlon Synthetic Fibres and Chemicals Ltd.      At all  material times  the company  manufactured nylon yarn, a synthetic man-made fibre under an industrial licence under an  industrial licence  granted by  the Government  of India. For  the  manufacture  of  nylon  yarn,  the  company imported caprolactum  monomer. The company paid customs duty as well  as countervailing duty on its import of caprolactum monomer. This  raw material  was used  by  the  company  for manufacture of  nylon yarn.  In the  course of processing of caprolactum monomer  the 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. The question relates to the  levy of excise duty on these polymer chips. The only question which now survives for our determination is whether these polymer  chips can  be classified  under Item  15A  of Schedule I  to the  Central Excises and Salt Act, 1944 as it stood during  the period 1962-1972, since this period covers all the appeals.      The assessee  has described the process employed in its factory for  polymerisation  of  caprolactum  monomer.  Once caprolactum is  polymerised, it  becomes nylon.  In order to change the  form of  this substance and give it the required properties which  enable textile yarn to be produced from it

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

further processing is required in the course of which, at an intermediate stage,  polymer chips  are produced.  The chips are obtained for the purpose of removing the remnant monomer so that  the subsequent  processing becomes more convenient. These chips  which are  otherwise called  Nylon 6 Chips, are then dried,  melted and spun into continuous filament by the process of  extrusion. The  spun filament  undergoes further processing in  order to get yarn in a saleable form. Polymer chips which  are produced  by the assessees companies have a relative viscosity  of 2.22  to 2.30.  The average molecular weight ranges  from 10,000 to 18,000. These chips are suited only for  the manufacture  of textile  fibres and  are  used exclusively for that purpose.      With this  background, let  us  examine  whether  these polymer chips fall under Entry 15A. Entry 15A was amended on 18th of  February, 1974.  We,  therefore,  are  required  to consider Entry  15A as it existed prior to 28-2-1964 and the Entry as it existed after 28.2.1964.                                   I      Entry 15A  as it  existed prior  to  28-2-1964  was  as follows:      "Entry 15A: PLASTICS, ALL SORTS:      (i)  Moulding powers, 25% ad           valorem  granules and flakes           (thermosetting and           thermoplastic).      (ii) Polythelene   fixer,   Layflat           tubings  and   P.V.C.   sheets           (that  is  to  say,  polyvinyl           chloride sheets),      (iii) Not otherwise specified."      The assessee  contends that  polymer chips  or nylon  6 chips manufactured  by the  assessee are  not known  in  the trade as  plastics and hence they cannot be classified under Entry 15A which deals with plastics all sorts.      Encyclopaedia Britannica, Volume 18, while dealing with "plastics" has this to say on the subject:      "The  articles   called   "plastic"      generally require  shaping by  heat      during   their    fabrication    by      moulding or  extrusion.  Since  the      newer   synthetic    products   can      frequently be used inter-changeably      as coatings  or as  mouldings,  the      distinction  between   resins   and      plastics  become  less  pronounced.      Moreover  modern  technology  shows      that  the   materials   which   are      designated   as   rubber,   fibres,      resins  and   plastics  are   of  a      similar molecular  structure and by      appropriate chemical  and  physical      treatment,  it   is   possible   to      interconvert    any     of    these      materials. It  follows that certain      structural features  are common  to      all these products and being common      they  relate   to   similarity   in      physical     properties     between      materials which are not necessarily      chemically  related.  It  might  be      argued that  rubber is  a  plastic,      since  it   can  be  fabricated  by      procedure similar to those employed      in moulding plastics; but rubber is

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

    not generally  considered to  be  a      part of the plastics industry......      Similarly  the  fibre  industry  is      considered to be independent of the      plastics industry  and  here  again      the same  raw-materials, polyamides      (nylon)  cellulose   and  cellulose      acetate   are    used    by    both      industries.   Plastics   are   also      divorced from  the  self-supporting      type of film production such as the      manufacture  of  photographic  film      and celluphone.  The term  plastic,      therefore,   is    essentially    a      commercial classification  to which      no strictly  scientific  definition      can be applied."                     [underlining ours]      The  term   ‘plastic’,  therefore,   is  a   commercial classification which  covers various  kinds  of  natural  or synthetic materials which can be shaped by heat during their fabrication either  by moulding  or by  extrusion and  which will retain  that shape  during use.  It is  also made clear that normally,  rubber or  synthetic material  which is used for  the   manufacture  of  fibres  and  yarn,  or  for  the manufacture of  photographic film  and  celluphone,  is  not commercially considered as plastic.      In the  book "Polymers  and Resins"  by Brage  Golding, 1959 Edition, "plastic" is defined as under:      "A plastic  has been  defined in  a      limited sense  as any  of  a  large      group   of    organic   substances,      whether natural or synthetic, which      can be moulded (Plastikos = fit for      moulding). The  noun  ‘Plastic’  is      usually  applied  to  all  polymers      which  are  not  considered  to  be      elastomers or  fibres;  i.e.  which      exhibit  neither   the  long  range      elasticity of  elastomers  nor  the      very  high  crystallinity  of  most      fibres. In  the engineering  sense,      however, a  plastic  is  a  mixture      containing  one   or  more   resins      compounded      with       fillers,      plasticizers, lubricants, dyes etc.      which   has    been    subsequently      fabricated.      Commercial nylon  fibres are linear      and have  molecular weight averages      of the  order of  12,000 to 20,000.      If the  average molecular weight is      below  6,000  little  or  no  fibre      formation   is   possible;   fibres      formed  from   polymers   with   an      average molecular  weight of  about      6,000  to   10,000  are   weak  and      brittle. As  the average  molecular      weight increases  above this range,      the   fibre    becomes    stronger.      However, if  the  molecular  weight      runs much  over 20,000  the polymer      becomes too  difficult to  melt  or      dissolve. Therefore, the process of      polymerisation must  be stopped  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

    the   desired   average   molecular      weight range."                     [underlining ours] Chamber’s Dictionary defines ‘plastics’ as "generic name for certain natural  and synthetic  substances which  under heat and pressure become plastic and can then be shaped or cast".      In  Webster’s   Third  New   International   Dictionary ‘plastic’ has been described as under:      "Plastic -  (1) a substance that at      some stage  in its  manufacture  or      processing can  be shaped  by  flow      (as  by   application  of  heat  or      pressure) with  or without fillers,      plasticizers,  rainforcing  agents,      or  other  compounding  ingredients      and that  can retain the new solid,      often rigid, shape under conditions      of use;      (2)  any   of  a   large  group  of      materials of  high molecular weight      that   usually   contain   as   the      essential ingredient a synthetic or      semi-synthetic  organic   substance      made    by     polymerization    or      condensation (as  polystyrene or  a      phenol-formaldehyde    resin)    or      derived from  a natural material by      chemical   treatment   (as   nitro-      cellulose from cellulose), that are      molded, cast,  extruded, drawn,  or      laminated under  various conditions      (as  by   heat  in   the  case   of      thermoplastic     materials,     by      chemical condensation  in the  case      of   thermosetting   materials   or      polyesters, or  by  casting  during      polymerization  of  monomers)  into      objects of  all  sizes  and  shapes      including films and filaments."      Our attention is also drawn to the American Society for Testing Material  Standard which makes a distinction between "nylon" and  "nylon plastics"  -- including the former under the heading  ‘Definition of  Textile Terms’  and the  latter under  the   heading  ‘Plastics  Nomenclature’.  The  Indian Standard Institute Glossary also makes a distinction between "nylon"  and   "nylon  plastics"  and  similarly  classifies "nylons" under  the glossary  of textile  terms  and  "nylon plastics" under  the  glossary  of  terms  used  in  plastic industry.      It is, however, urged on behalf of the Revenue that the chemical composition  of the  polymer chips  (Nylon 6 Chips) which are  produced  by  the  assessee  is  similar  to  the chemical composition  of material  used in plastic industry. And  hence,  going  by  the  chemical  composition  of  this material, it  can be  appropriately classified as a plastic. This contention will have to be examined in the light of the wording of  Entry 15A. Entry 15A does not use any scientific or technical  term. It  deals with "plastics, all sorts". As Encyclopaedia Britinnica  has described,  the term ‘plastic’ is a  commercial classification. When this kind of a term in commercial use  is used  in an excise entry which deals with marketable commodities  which are  manufacture and which are subject to  the levy of excise, we will have to examine that term in  the light of how it is understood in the trade. If, however, strictly  technical or  scientific words  are used,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

the approach for their interpretation may be different.      We will  refer to  only some  of the  authorities which have been cited before us in this connection. As far back as in 1891,  in the  case of Unwin v. Hanson ([1891] 2 Q.B. 115 at 119),  the court  observed, "If  the Act  is directed  to dealing with  matters  affecting  everybody  generally,  the words used  have the  meaning attached to them in the common and ordinary  use of language: if the Act is one passed with reference to  a particular  trade, business, or transaction, and words  are used  which everybody  conversant  with  that trade, business,  or transaction,  knows and  understands to have a  particular meaning  in it  then the  words are to be construed as  having that  particular meaning, though it may differ from the common or ordinary meaning of the words."      In the case of Ramavatar Budhaiprasad etc. v. Assistant Sales Tax  Officer, Akola  ([1962] 1 SCR 279), the Court was concerned with  the scope of the word ‘vegetables’ occurring in C.P.  and Berar  Sales Tax Act, 1947. The Court said that betel leaves  cannot be  classified as  vegetables  although botanically they  may fall  in that  category, because betel leaves are not commonly understood as vegetables.      Again in  the case  of The  Commissioner of  Sales Tax, Madhya Pradesh,  Indore v.  M/s. Jaswant  Singh Charan Singh (AIR 1967  SC 1454)  the Court  held that  the Entry  "Coal" under the  Madhya Pradesh  General Sales Tax Act would cover charcoal  also.   The  Court   said  that  while  "Coal"  is technically understood  as a  mineral product while charcoal is manufactured  by human agency from products like wood and other things, it is now well-settled that while interpreting items in  statutes like the Sales Tax Acts, resort should be had, not  to the scientific or the technical meaning of such terms, but  to the meaning attached to them by those dealing in them.  (See in  this connection  South Bihar  Sugar Mills Ltd. etc.  v. Union  of India  & Ors.  [(1968) 3 SCR 21] and Dunlop India  Ltd. v.  Union of  India &  Ors. [(1976) 2 SCR 98]).      In the  case of Asian Paints India Ltd. v. Collector of Central Excise (1988 (35) ELT 3), Sabyasachi Mukharji J. (as he then was) has summed up the rule of interpretation in the following words:      "It  is   well-settled   that   the      commercial meaning  has to be given      to the expressions in Tariff Items.      Where definition  of a word has not      been given  it must be construed in      its popular  sense.  Popular  sense      means  that   sense  which   people      conversant with  the subject-matter      with which  the Statute is dealing,      would  attribute   to  it..........      that  in   interpreting  items   in      statutes like  the  Excise  Act  or      Sales  Tax   Acts,  whose   primary      object was to raise revenue and for      which purpose  to classify  diverse      products, articles  and substances,      resort should  be had  not  to  the      scientific and technical meaning of      the terms  or expressions  used but      to their  popular meaning,  that is      to say,  the  meaning  attached  to      them by those dealing in them.      In the  present case, since Entry 15A as it then stood, uses a commercial term "plastics" which is well-known in the trade and  is used  in the  trade, we should not go into the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

technical analysis  of the  composition and  character of  a plastic product.  We should  go  by  the  meaning  which  is attached to  the term  ‘plastics’  in  the  trade  parlance. Plastics as  understood in  the trade  cover  all  kinds  of synthetic materials.  As the  Encylopaedia Britannica.  Sets out very  clearly, there is a distinction made in commercial parlance  between   materials  used  in  the  production  of plastics and  materials used   in  the production of fibres, films or  rubber although  they may share certain structural features. The assessee has also filed affidavits from people in  the  trade  to  say  that  polymer  chips  of  the  kind manufactured by  the assessee are not considered as plastics by those dealing in plastics.      Prior to  the assessee’s  manufacturing these  chips in its own plant, the assessee used to import similar chips for the purpose  of manufacture  of nylon  yarn from  BASE.  The product imported  was caprolactum Ultramid BS. Our attention is drawn  to the catalogue of BASF products of July 1961, in which captrolactum Ultramid BS is shown under "Raw materials for synthetic  fibres", while  there is  a separate head for "Plastics and  auxiliaries for  plastics" under  which other material such  as Ultramid  A, Ultramid  AK, Ultramid  B and Ultramid BM  are shown.  This also  indicates that  material which is  used for  the production  of  nylon  yarn  is  not considered in the trade as a plastic material. The assessee, therefore, is  right when  it contends  that Item  15A as it stood prior  to  28.2.1964  does  not  cover  polymer  chips manufactured by it.      Item 15A,  however, as  amended after  28.2.1964 was as follows:      15A. ARTIFICIAL OR SYNTHETIC RESINS      AND PLASTIC MATERIALS, AND ARTICLES      THEREOF. Twenty percent ad valorem.      (1) Artificial  or synthetic resins      and plastic  materials in any form,      whether solid,  liquid or pasty, or      as powder,  granules or  flakes, or      in the  form of  moulding  powders,      the following, namely:-      (i) Condensation, Poly-condensation      and Poly-addition products, whether      or not modified or polymerised;      including Phenoplasts, Aminoplasts      Alkyds, Polyurethane, Polyallyl      Esters ad other Unsaturated      Polyesters;      (ii)       Polymerisation       and      Copolymerisation products including      Polyethylene                    and      Polytetrahaloethylene,      Polyisobutylene,       Polystyrene,      Polyvinyl    chloride,    Polyvinyl      acetate,  Polyvinyl   Chloroacetate      and  other  Polyvinyl  derivatives,      Polyamides,     Polyacrylic     and      Polymethacrylic   derivatives   and      Coumarone-Indene resins; and      (iii) Cellulose  acetate (including      di-or    tri-acetate),    Cellulose      acetate  butyrate   and   Cellulose      propionate,   Cellulose    acetate-      propionate,  Ethyl  cellulose,  and      Benzyl      cellulose       whether      plasticised or not, and plasticised      Cellulose nitrate.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

    (2) Articles  made of plastics, all      sorts,   including   tubes,   robs,      sheets,   foils,    sticks,   other      rectangular  or   profile   shapes,      whether  laminated   or  not,   and      whether    rigid    or    flexbile,      including   layflat   tubings   and      Polyvinyl chloride sheets.      Explanation:- For  the  purpose  of      sub-item(2),  ‘plastic’  means  the      various  artificial   or  synthetic      resins or plastic material included      in sub-tem (1)."      The main  heading of  this item  is now changed to read "Artificial or  synethic resins  and plastic  materials  and articles  thereof".  Clause  (1)  refers  to  artificial  or synethic resins  and plastic  material in  any form,  "among them the  following" which are described in sub-clauses (i), (ii) and  (iii). These  sub-clauses describe  the  technical process by  which the  end product  is derived. Thus in sub- clause (i) for example, the processes which are referred to, inter alia,  are condensation,  poly-condensation and  poly- addition and  products resulting  therefrom. Sub-clause (ii) refers, inter  alia, to  polyamides. All these are technical and scientific  terms and  processes. The  Revenue  contends that in the strict sense of the term, polymer chips or Nylon 6  Chips   which  are   manufactured  by  the  assessee  are artificial or  synthetic resins as they fall in the category of polyamides  in sub-clause (ii) of Clause (I) of Item 15A. The assessee, however, contends that artificial or synthetic resins which  are covered by Item 15A refer only to plastics and they  do not  refer to  those  artificial  or  synthetic materials which  may be processed in the manner described in sub-clauses (i)  to (iii),  but which  give rise to products used for  the textile  industry such  as the  polymer  chips manufactured by the assessee.      The assessees  have pointed  out that  the  words  "the following" in  Clause (1)  of Item  15A which  precede  sub- clauses  (i)   to  (iii)  clearly  indicate  enumeration  or description of  the kinds  of artificial or synthetic resins and plastic  materials in different forms in sub-clauses (i) to (iii). Therefore, all products covered by sub-clauses (i) to (iii) must answer the basic description of "Artificial or synthetic resins  and plastic  materials". These  sub-clause cannot cover  materials not known as artificial or synthetic resins or  plastic material.  The assessees  further contend that "synthetic  resins" is  a term  used to  describe basic material in plastic industry. It does not refer to basic raw material used in other industries.      The question,  therefore, which  we have  to decide  is whether artificial  or synthetical resins should be confined only to  those  resins  which  ultimately  produce  material having plastic  qualities  or  whether  they  would  include within their  scope  other  kinds  of  material  derived  by similar processes  which are  described in  sub-clauses (i), (ii) and  (iii), but  which are  suitable for  use in  other kinds of  industries such  as rubber  industry, textiles  or films.      Are  the   words  "artificial   or  synthetic   resins" interchangeable with  or  linked  with  the  words  "plastic material"? Brage  Golding in  his treatise  on "Polymers and Resins", in Chapter I which deals with introductory concepts and definitions,  after stating  that it is unfortunate that there are  no explicit  definitions of  the words resins and plastics, the  meanings being  understood by  those who  use

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

them, has attempted to define these expressions as follows:      "Probably the  closest one can come      to a  definition of  resins is that      it  is   a  solid   or  semi-solid,      natural   or    synthetic   organic      substance   of    relatively   high      molecular weight (not necessarily a      polymer) which  exhibits  no  sharp      melting  point,   breaks   with   a      conchoidal  fracture,  and  usually      (but not  always) is  predominantly      amorphous in  structure. A  plastic      has been defined in a limited sense      as any  of a large group of organic      substances,  whether   natural   or      synthetic,  which   can  be  molded      (plastikos - fit for molding)."      He goes on to observe:      "The   term    ‘resin’   originally      referred   to    natural   products      (particularly of  vegetable origin)      but  now   includes  the   man-made      substances. As  will be  seen  from      the physical  descriptions  of  the      polymers given  in later  chapters,      the above definitions of both resin      and plastic  include many  of these      polymers, and  the  terms  are  now      often used interchangeably."                     [underlining ours]      Webster’s Dictionary  defines "Resins  (synthetic)" as: "any of a large class of synthetic products (as alkyd resins or phenolic  resins) usually  of high  molecular weight that have some  of the  physical properties of natural resins but typically  are   very  different  chemically,  that  may  be thermoplastic   or   thermosetting,   that   are   made   by polymerization or condensation, and that are used chiefly as plastics  or  the  essential  ingredients  of  plastics,  in varnishes and  other coatings,  in  adhesives,  and  in  ion exchanges (when  the resin itself is capable of being shaped into  a   finished  article   without  a   plasticizer,   as polystyrene),   the    terms   resin    and   plastic    are interchangeable  for   that   material   -   in   industrial terminology the  unfabricated material is sometimes called a resin and  the fabricated  article a  plastic." (underlining ours). Apart  from the  portion underlined, the reference to thermoplastic and  thermosetting qualities of such resins is also a reference to their plastic qualities.      The  British  Plastics  Year  Book  of  1967  describes synthetic resins  as "resins produced by chemical reactions, they are  of different  chemical composition  and  behaviour from natural  resins. The  term is  now generally applied to all polymeric plastics materials with the possible exception of cellulosic  and casein  materials. Synthetic  resins  are classified by  the  initial  reacting  materials,  e.g.,  as phenolic amino,  acrylic or  vinyl resins,  or  on  chemical composition, e.g., polyester ad epoxy resins."      Sorenson  and   Campbell  in  their  book  "Preparation Methods of  Polymer Chemistry"  in Chapter  7  ‘Cross-linked synthetic  Resins’  have  said:  "Today,  ‘resin’  covers  a multitude of  polymer types, including the classical phenol- formaldehyde condensation  and the  relatively recent  epoxy resins, vinyl  polymers such  a polystyrene  and poly methyl methacrylate and  condensation polymers  of the polyamide or polyester class. Most of the application of the term ‘resin’

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

is to  those  linear  or  cross-linked  (or  cross-linkable) polymers that  are used  in molding,  casting, or  extruding operations and  in surface  coatings; and,  to  most  cross- linked (or  cross-linkable) polymers, no matter what the end use (as  in adhesives,  textile finishes,  etc.). Thus  poly methyl methacrylate and various polyamides, both essentially linear polymers,  are termed molding resins when directed to a molding  end use.  However, polyamides would not be termed resins by the synthetic fibre industry in their usage of the material.      In other  words, "synthetic  resin" is  a term  used in plastic industry  and possibly  in other industries, but not in the  textile industry  to refer  usually to  unfabricated material out of which the end product is made.      While  the   first  three  descriptions/definitions  of synthetic resins  emphasise the plastic quality of synthetic resins, the  last description  clearly brings  out the  fact that in  the synthetic  fibre industry, polyamides which are used as raw material would not be termed as resins. The term ‘synthetic  resins’,   therefore,  appears  to  be  used  in connection with plastic materials. The British Plastics Year Book of  1967 quoted  earlier also  emphasises that the term ‘synthetic resins’ is now generally applied to all polymeric plastic materials  with the possible exception of cellulosic and casein materials. Webseter’s Dictionary (supra) has also described  synthetic   resins  as   those   which   may   be thermoplastic  or   thermosetting  --  these  being  typical characteristics of  plastic material  and has  clearly  said that synthetic  resins  are  used  chiefly  as  plastics  or essential ingredients  of plastics  as also in varnishes and other coatings  and in adhesives and ion exchanges. There is no reference  here to their being used in the manufacture of yarn. Webseter’s  Dictionary  also  states  that  the  terms ‘resin’ and ‘plastic’ are interchangeable and some times the unfabricated material  is called  resins and  the fabricated material is  called a plastic. This perhaps explains why the words "artificial  or synthetic  resins" were added in Entry 15A to  "plastics" in  order to  refer to  and cover the raw material  which   goes  into   the  manufacture  of  plastic materials. Encyclopaedia  Britannica also  which was  quoted earlier by  us, states  that while the designation "plastic" is broader  generally than  the term "resin", both terms are used indiscriminately  with respect  to synthetic  products. Therefore, the  reference material  which is produced before us indicates  that synthetic  resins are  used in connection with  plastic  material  and  that  often  the  unfabricated material is  referred  to  as  resin  while  the  fabricated article is  referred to  as a  plastic. Polyamides which are used for the purpose of manufacture of yarn are not referred to as synthetic resin in the textile industry.      The  term   ‘synthetic  resin   or  artificial  resin’, therefore, far  from being  scientifically precise, seems to be  as   elusive  to  define  as  the  term  "plastic".  The preponderance of  view appears to be, however, that the term ‘synthetic resin’  is used in connection with material which is used for producing articles of plastic and is not used to refer at least to material used in the textile industry.      Our attention  has been  drawn  to  "Concise  Guide  to Plastics" by  Simmonds and  Church in  which a passage under the heading Polyester Resin is as follows:      "In the  broad sense  of  the  term      polyester resins include many types      of resinuous  condensation products      and collectively  represent a broad      and expanding field in the plastics

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

    industry... As  indicated in  other      section, alkyd  resin are basically      polestar. Saturated liner polyester      resins can be film or fibre forming      material,       for        example,      polyethelene, terephathalate". This passage,  however, does not assist us in the sense that it does  not tell  us what  the terms  "synthetic resins" or "artificial resins"  generally refer  to. It  does, however, indicate that  the term  "polyester  resin"  represents  the broad and  expanding  field  in  the  plastic  industry  and satured liner  polyester resins  can be  fibre forming. From the passage  it is not clear whether the latter are commonly referred to  as synthetic  resins  or  not.  By  and  large, therefore, one  can come  to the  conclusion that  the  term ‘artificial and  synthetic resin’  in used  in  the  plastic industry to  refer  to  various  materials  derived  by  the processes which  are referred  to sub-clauses  (i), (ii) and (iii) of  Entry 15A for the purpose of producing material or products which  are suitable in the manufacture of plastics. The processes  which are  described in sub-clauses (i), (ii) and (iii)  are undoubtedly technical, scientific or chemical processes and  the products which are derived as a result of these processes are also described in technical terms in the said  sub-clauses.   Polyamides,  for   example,  which  are relevant in  the present  case, would cover, by themselves a wide range  of products.  However,  these  sub-clauses  come under the  main heading of artificial or synthetic resins or plastic materials.  Polyamides  of  textile  grade  are  not plastic materials  nor are  they referred  to  as  synthetic resins in  the textile  trade. Hence  polyamides of  textile grade would  not fall  under either "Artificial or synthetic resins" or  under "plastic  material". They would be outside the  ambit  of  Entry  15A.  The  polymer  chips  which  are manufactured by  the assessee  would  not,  therefore,  come under the  category of  artificial or synthetic resins also. Polyamides, however,  which are capable of producing plastic materials are known in the plastic trade as synthetic resins and would be covered by Item 15A.      Since the  technical literature  and dictionaries which have been  cited by  us have  emphasised the  conjunction of artificial or  synthetic resins  with plastics,  it  is  not possible for  us to ignore this association. Therefore, even if the  term "Artificial or synthetic resin" is construed as covering products derived by processes technically described in sub-clauses  (i), (ii)  and (iii)  of Clause (1) of Entry 15A, that  product must  answer  the  basic  description  as "artificial or  synthetic resin".  Polyamides in the form of polymer chips  of textile  grade are  not known as synthetic resins. They are also not plastics. Hence Entry 15A does not cover them. The assessee is, therefore, entitled to succeed.      The appeal  of the  assessee in  C.A.  No.  3495/82  is allowed and  the appeals  of the revenue in Transferred Case No........../96 (arising  out of  T.P.(C) No.  188/83  being O.A. No.  84 (arising  out of T.P. (C) No. 188/83 being O.A. No. 84  of 1970  of the  Bombay High Court) and Civil Appeal No. 3507  of 1982 are dismissed. In the circumstances of the case, there will be no order as to costs.