Trade parlance governs excise classification of textile-grade polymer chips, keeping them outside the plastics tariff entry.

Tariff classification under Item 15A turned on trade parlance, not scientific composition. For the pre-28 February 1964 entry, textile-grade polymer chips or Nylon 6 chips used captively for nylon yarn were not regarded in commerce as plastics, so they fell outside Item 15A and were not liable to excise duty under that heading. For the amended post-28 February 1964 entry, polyamides included in the wording still had to answer the description of synthetic resins or plastic materials; textile-grade chips used as raw material for nylon yarn were not so known in trade and remained outside the entry. The excise demand based on Item 15A could not be sustained.

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Issues: (i) Whether polymer chips or Nylon 6 chips manufactured and used captively for nylon yarn were classifiable as plastics under Item 15A of Schedule I to the Central Excises and Salt Act, 1944 as it stood prior to 28-2-1964; (ii) Whether the amended Item 15A, as it stood after 28-2-1964, covered textile-grade polyamides or polymer chips used in the manufacture of nylon yarn.

Issue (i): Whether polymer chips or Nylon 6 chips manufactured and used captively for nylon yarn were classifiable as plastics under Item 15A of Schedule I to the Central Excises and Salt Act, 1944 as it stood prior to 28-2-1964.

Analysis: The expression "plastics" in the unamended entry was treated as a commercial term to be understood in trade parlance and not by its scientific composition. The materials used for textile fibres and yarn were distinguished in commercial usage from plastics, and the evidence showed that polymer chips of textile grade were not regarded in the trade as plastics.

Conclusion: The polymer chips did not fall within Item 15A as it stood prior to 28-2-1964 and were not chargeable to excise duty under that entry.

Issue (ii): Whether the amended Item 15A, as it stood after 28-2-1964, covered textile-grade polyamides or polymer chips used in the manufacture of nylon yarn.

Analysis: Although the amended entry referred to artificial or synthetic resins and plastic materials and included polyamides, the expression still had to answer the basic description of resin or plastic material. The Court held that polyamides of textile grade, used as raw material for nylon yarn, were not known in the textile trade as synthetic resins or plastics and were outside the ambit of the amended entry.

Conclusion: The amended Item 15A also did not cover the polymer chips manufactured by the assessee.

Final Conclusion: The classification dispute was resolved in favour of the assessee, and the excise demand based on Item 15A could not be sustained for the polymer chips in question.

Ratio Decidendi: In tariff classification, a commercially understood expression must be construed in its trade parlance, and materials used in the textile industry are not brought within a plastics entry unless they are themselves known in trade as plastics or synthetic resins.

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