TaxTMI 
TaxTMI 
2014 (2) TMI 780
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....08 of the Customs Tariff and the concessional rate of 25% was made available subject to condition No.5 that the importer had to follow the procedures set out in Customs (Import of Goods at Concessional Rate for Manufacture of Excisable Goods) Rules, 1996. The goods were imported and the time of clearance the exemption under relevant notification was extended. The importer followed the conditions as required and "nylon filament yarn" was manufactured out of the goods imported and end use certificate also was furnished to the customs authorities. Later Revenue raised an objection that notification is applicable only to "nylon chips" falling under Chapter Heading 39.08 and not to "Nylon 6 Resin" which was the declaration as per the Bill of Entry. The matter was adjudicated. The adjudicating authority held that what was imported is 'Nylon Resin' in the form of granules and these goods cannot be considered as 'chips'as claimed by the importers. He also found that the same manufacturer was describing another product by name 'ULTRAMID C4 Natural' as 'Nylon Chips'". As the manufacturer was making a distinction between Nylon Chips and Nylon Resin in granule form, the adjudicating authority ....
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....esin in granular form is not covered under the Notification which covers only Nylon chips". Based on the findings above, Commissioner (Appeals) rejected the appeal filed by appellant. Aggrieved by the order of Commissioner (Appeals), the appellant filed this appeal. 4. Arguing for the appellant, Ld. advocate submits that the descriptions "resin, chips", "granules" etc. are used interchangeably. He produced extract from the 'Directory of Fibre' and Textile Technology" to point out that the meaning of "chip" is described in the said directory as "the form of polymer feedstock used in fibre production". His primary contention is that what is imported was feedstock for fibre production and supplier has also certified so and the goods were actually so used. According to him, the word "chip" in the dictionary does not denote any physical form as indicated in Note 6 of Chapter 39. He further pointed out that he had produced certificate dt. 13-03-2003 from Professor of High Polymer Engineering Laboratory, Chemical Engineering Department, IIT Madras to the following effect :- "Extrusion grade polyamides (Nylon) are availab....
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.... record. In this affidavit it denied that the polymer chips which are used by the petitioner company for spinning yarn are not fit for being moulded into plastic articles or other industrial components. Reference is made to the various definitions of 'Plastic' given in some of the standard books of which I shall have occasion to deal with at later stage in my judgment. 4.5 Ld. Advocate submits that the appellant has adduced evidences to the effect that chips and resin are one and the same and as against such evidence Revenue has not adduced any evidence that commodity known in commercial parlance as 'Nylon Chips' is different from the commodity "Nylon 6 Resin" and such chips only can be used as feedstock for production of textile filaments. He points out that the meaning of the word 'chip' is not explained in the Customs Tariff or in the exemption notification claimed. So he prays that the impugned order be set aside and his appeal may be allowed. 5.1 Opposing the prayer, Ld. AR for Revenue submits that Revenue has two main arguments. Primarily, the argument is that a "resin" cannot be considered as "chip". Their additional argument is that a commodity which is in granule form ca....
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....not a correct position as may be seen from the opinion of the Professor of IIT Madras. Further in this case the goods were in granule form and the accompanying documents described it as Nylon Resin and goods were declared in the Bills of Entry to be resin and the declarations were accepted. So Revenue has accepted the position that Resin can be in solid form. Even otherwise these days a simple search on the internet with the expression 'Plastic Resin' will show suppliers and their products along with images of the physical form which are mostly in different solid forms. Therefore the first ground raised by Revenue that Resin cannot be chip has no merit. 9. Another argument of Revenue is that HSN notes classifies primary forms into three groups namely,- (1) Liquids and Pastes, (2) Powder granules and Pastes (3) Blocks of irregular shape, lumps and similar bulk forms Revenue argues that granules fall in category (2) but chips fall in category (3). This argument is not correct for the reason that category (3) covers only bulk forms like Blocks and Lumps. Chips by its natural meaning cannot connote a bulk form. So chips will fall under category (2) only. 10. Therefore only issue ....