Holding

Diluted silicone oil and its preparations are to be taxed under Central Excise Tariff Item 15AA, while undiluted silicone oil that has undergone condensation, polycondensation or polyaddition is taxable under Item 15A(1); neither category falls within the residuary Item 68.

Summary

The Supreme Court examined three groups of appeals concerning the classification of silicone products for Central Excise and Customs duties. It held that silicone oil that has undergone condensation, polycondensation or polyaddition falls under Central Excise Tariff Item 15A(1) and the corresponding Customs heading 39.01/06, attracting counter‑vailing duty. Silicone oil that is merely diluted with water or other agents and used to make emulsions, softeners or wetting agents does not meet the criteria of Item 15A(1) and is instead classifiable under Item 15AA as an organic surface‑active preparation. The Court rejected the Revenue’s contention that such diluted preparations should be taxed under Item 15A(1) and also rejected the assessee’s claim that the products fell under the residuary Item 68 of the Customs Tariff. It affirmed the Tribunal’s expert classification, dismissed the appeals filed by the Revenue (categories I and II), and partly allowed the appeals of the assessees (category III), directing reassessment under the correct tariff items.

Issues considered

The correct tariff classification of diluted silicone oil and silicone preparations under Central Excise Tariff Item 15A(1) versus Item 15AA.
Whether silicone oil imported and used in diluted form is liable to counter‑vailing duty under Item 15A(1) or falls under the residuary Item 68 of the Customs Tariff.
The effect of the 1982 amendment to Item 15A(1) on the classification of silicone products.
The extent to which the Tribunal's technical findings can be interfered with on appeal.

Legislation cited

Subjects

central excisecustoms dutytariff classificationsilicone oilcountervailing dutycondensationpolycondensationtechnical expert tribunalItem 15A(1)Item 15AAItem 68

Judgment

RELIANCE SILICON (I} PVT. LTD. A
v. '
COLLECTOR, CENTRAL EXCISE, THANE

NOVEMBER 6, 1996

[S.P. BHARUCHA AND S.B. MAJMUDAR, JJ.] B

Central Excises and Salt Act 1944--Silicone Oil-Preparations-
Classification whether under Item 15A(1} or 15AA--Countervailing duty
paid under Item 15A(I) on import-Preparations made by mixing the oil
with water and other diluting agents-Classifiable under Item 15AA as
held by CEGAT and not under Item 15A(l)-1982 amendment to Item C
15A(1) would not alter the position.

Silicone Products-Classification-Whether under Item 15A(1) or
Item 68-Held classifiable under Item 15A(I)-Any such product emerging
as a result ofcondensation, poly condensation or poly addition also covered
under the ambit of Item 15(A}. D

Customs Tariff Act-Silicone Products-Classification-Whether
under Heading 39.01106 or 38.01119-Held, Silicone products having
undergone process ofcondensation, poly condensation and poly-addition-
Classifiable under Heading 39.01106 and not under 38.01119. Also, for E
purposes of countervailing duty covered by Tariff item 15A (1)-Amended
item 15A not pari-materia with the earlier Item 15A.

Appeals-Matters of highly technical nature-Decision of by expert
body on the subject-Not to be lightly interfered with.
F
Interpretation of Statutes :

Classification of items under Central Excises and Salt Act 1944-
Where product squarely covered by express words of an item, reference to
the past history is ofno relevance for deciding the taxability ofthe product. G

These appeals were filed against diverse orders of the Central
Excise and Gold, Appellate Tribunal (CEGAT). In the first category
of cases filed on behalf of the Revenue, the issue to be determined was
whether the preparations from silicone manufactured by the assessee-,
manufacturers at the relevant time was classifiable under Central' H
501
502 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A Excise Tariff Item ISA(I) or !SAA. A Five-Member Bench of the
CEGAT had in an earlier matter taken the view that Silicone
preparations are not silicone but only preparations containing silicone
for use in textile processing and by their very nature these preparations
are akin to surface active preparations, wetting agents, softener and
as such classifiable under Item !SAA of Central Excise Tariff. It was
B contended that the five Member Bench of the Tribunal had erred in
taking the view that silicone preparations were covered under C.E.
Tariff Item !SAA and not ISA(i).

In the second category of cases, the main grievance of one of
the assesses was that during the relevant period silicone oil imported
C was governed for the purpose of customs duty and countervailing
duty not under tariff Item ISA(!) but by residuary item 68 and
accordingly covered by Chapter 38 of Customs Tariff of India I 98S-
86 and not by Chapter 39 thereof. One of the contentions put forth
by the assessees was that earlier Tariff item I SA of CE Tariff was
almost identical with the amended item ISA(I) save and except
D additions of some further items but for applicability of item 15A(I)
it had to be shown that the product concerned was artificial or
synthetic resin or an article made up therefrom.

In the third category of cases, in the two appeals preferred by
E the assessees, the grievance was with respect to the Tribunal's order
holding classification of silicone preparations under T.I. ISA(!) and
not under T.I. 68.

Dismissing the appeals comprised in categories (I) and (2) and
partly allowing the appeals comprised in category (3), this Court
F
HELD : I. Diluted Silicone Oil and other preparations from
silicone are classifiable under Tariff Item I5AA. A mere look at T.I.
15A shows that if the commodity manufactured Is artificial or synthetic
resin or any plastic material It would be covered by the sweep of this
G item. The products prepared out of silicones by mixing them with
other diluting agents like water etc. are not within the sweep of the
said item. The silicone Oil which was impol'ted by the manufacturers
was subsequently diluted and mixed and used in the manufacture of
their products namely, silicone softeners 662 and silicone AU 33 I etc.
They manufactured no goods by the process of condensation and·
H polycondensation etc. Such silicone preparations out of imported
RELIANCE SILICON (I) PVT. LTD. 1•. COLLECTOR, CENTRAL EXCISE 5Q3

silicone oil which underwent process of dilution could not be treated A
to have remained silicone itself so as to attract Tariff Item ISA(!).
(S08-E-F, S09-BC(

The amendment brought about in 1982 by amending Tariff item
ISA(l) would not make any difference in favour of Revenue for the
simple reason that before the amended Item ISA(l) would apply, it B
should be shown that by the process of manufacture undertaken by
the assessees concerned, any process of condensation, polycondensation
and polyaddition was resorted to qua the silicones concerned. Note
has been taken of the fact that the imported silicone oil which had
borne the counter-vailing duty under Tariff item ISA(l) has not
undergone such process of condensation, polycondensation and C
polyaddition but has only got diluted by addition of water and other
dilutants so as to make it a surface-active agent. Therefore such a
diluted product as manufactured by assessees cannot be brought to
tax under T.I ISA(!) but would if at all be assessed to excise duty,
only under T.I. !SAA. (S09-C-E]
D
Collector of Central Excise v. Auxichem, (1988) 34 ELT 637 (Trib),
affirmed.

2.1. It is true that the headnote of Tariff Item ISA talks of
artificial or synthetic resins and plastic materials. However it also
does talk of other materials and articles specified in the said item. E
Therefore it cannot be said that other articles and materials must
necessarily partake the character of artificial and synthetic resins or
must be r~sins of any other type. As such a view would make the wide
phraseology employed in the very same item :n its second part
concerning other materials and articles specified in the said item otios
and would denude these words of their real meaning and content. A F
reading of Tariff Item !SA(!) alongwith Explanations II and Ill makes
it clear that Tariff Item ISA(!) covers condensation, polycondensation
and polyaddition products whether or not modified or polymerised
and also covers esters and other unsaturated polyesters, silicones. If
any doubt remains in connection with the physical appearance of
such products containing silicone it is set at rest by Explanation III G
which lays down that sub-item(!) of Item ISA is to apply to materials
even in the liquid or pasty forms. Consequently silicone liquids also
would be covered by Tariff Item l SA(l) once it has undergone
condensation, polycondensation or polyaddition. (SIO-E-F, Sil-AB(

2.2. With respect to the third category of appeals, the judgment H
504 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A of the Tribunal is modified, to the effect that silicone oil simpliciter
manufactured would fall under T.I. 15A(l). While silicone oil
emulsions and other preparations of silicone would be covered under
T.I. 15AA and not under T.I. 15A(l) and in no case would be covered
under T.I. 68 as a residuary item. The excise authorities directed to
reframe relevant assessments accordingly and recompute the excise
B duty payable for the relevant period and if necessary, reissue
appropriate detention order. [514-E-F, G, 515-D)

3. It has to be kept in view that for deciding the liability to tax,
the clear wordings of the item have to be considered and given effect
to when on the express words of the item the products concerned get
C squarely covered by the same. Reference to the past history of the
said item as might have existed in a different form prior to its
amendment would loose all its significance and would remain a past
event only and cannot be validly pressed in service for deciding the
taxability of the product which is covered by the sweep of the amended
item. )513-E)
D
4.1. Silicone which has undergone process of condensation,
polycondensation and polyaddition is expressly covered by the heading
39.01/06. It therefore cannot be said that the products falls in· the ·
residuary heading 38.01/19 thereof. So far as the claim of exigibility
E to countervailing duty is concerned, a reading of Central Excise Tariff
Item 15A(l) re,d with explanations II and Ill clearly shows that
Silicone oil imported which has undergone the process of condensation,
polycondensation and polyaddition would squarely get covered by
the sweep of the said Tariff Item 15A(l). )512-F-G)

F TN Electricity Board v. Collector a/Customs, (1983) 12 ELT 174
(CEGA T), distinguished.

4.2. The whole Tariff Item 15A(l) underwent a sea change when·
it was amended in 1982 and came on the Statute Book. The
G explanations II and Ill to this ame,.ded item were not existing on the
Statute Book when earlier Tariff Item 15A(l) held the field.
Consequently, it cannot be said that the amended item 15A was almost
pari-materia with the earlier Item 15A. )513-D)

5. Where the question for consideration is of a highly technical
H nature depending for its answer on the chemical characteristics of
RELIANCE SILICON (!)PVT.LTD."· COllECTOR, CENlRALEXOSE [S.B. MAJMUDAR,J.] 505

the products on the anvil of scrutiny the decisions rendered by the A
Tribunal which is an expert body on the subject cannot be lightly
interfered with in appeals unless it is demonstrated that the findings
reached and conclusions arrived at by the Tribunal are such which
no reasonable man well acquainted with the subject could arrive at
or are otherwise erroneous in law or based on no evidence. [506-E-FJ
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 453 of
I 986 Etc.

From the Judgment and Order dated 2.7.85 of the Customs, Excise
and Gold (Control) Appellate Tribunal, New Delhi in A.No. ED (SB)
A.No. 2167/84-C in Order No.C. 485 of 1985.
. C

R. Mohan, D.A. Dave, S. Ganesh, K.J. John, D.S. Mehra, P.H.
Parekh, Ms. Bina Madhavan, P. Parmeswaran, Ms. Sushma Suri, R.P.
Srivastava, V.K. Verma, R.N. Karanjawala, Mrs. Manik Karanjawala and
Ms. Ruby Ahuja for the appearing parties.
D
The Judgment of the Court was delivered by

S.B. MAJMUDAR, J. This group of appeals arising from diverse
orders passed by Customs, Excise and Gold (Control) Appellate Tribunal
(hereinafter referred to as 'CEGAT') can be conveniently classified into E
three categories of cases. Category (I) consists of Civil Appeals Nos. 3105
(NM) of 1988; 1768 (NM) of 1990; 3284-85 (NM) of 1990; 5929 (NM)
of 1990; and 6263 (NM) of 1995 filed on behalf of Revenue by the
Collectors' of Central Excise, concerned, wherein it is contended that
preparations from silicone as manufactured by the respondent-
manufacturers at the relevant time were covered by Central Excise Tariff F
Item l 5A(l) and not by Tariff Item l 5AA as contended by the respondent-
manufacturers and as upheld by the Tribunal. Category (2) consists of
Civil Appeals Nos. 1942-53 of 1988; 2162-70 (NM) of 1988; and 3657-
72 (NM) of 1990 moved by MIS Hico Products Ltd. being aggrieved by
the diverse orders of the Tribunal which has taken the view that silicone G
oil manufactured by them and/or imported by them, as the case may be,
was liable to be brought to tax under Central Excise Tariff Item l 5A(l) as
applicable at the relevant time of manufacture or import, as the case may
be, and not under residuary Tariff Item 68 as contended by them for the
Purpose of determining the appropriate excise duty payable by them and/
or countervailing duty payable by them on these goods. Category (3) H
506 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A consists of Civil Appeal No.453 of 1986 moved by Mis Reliance Silicon
(I) Pvt. Ltd. and Civil Appeal No. 1507 of 1984 moved by Mis Hico
Products Ltd. These two appellants are manufacturers of preparations out
of silicone. The grievance of the appellant in Civil Appeal No.453 of
1986 is against the Tribunal's order holding that silicone preparations
prepared by them are covered by Tariff Item l 5A( I) and would not be
B covered by Tariff Item 68. The grievance of the appellant in Civil Appeal
No.1507 of 1984 is of a similar nature, namely, that silicone preparations
manufactured by them are wrongly held exigible to 'Central Excise duty
under Tariff Item 15A(I) by the Tribunal. As common questions arise for
our consideration, these matters were heard together and are being disposed
of by this common judgment.
c
Category (I)

For the sake of convenience we will first deal with the grievance
voiced on behalf of the Revenue by the Collectors concerned in their
appeals against the decisions of the Tribunal. It must be noted at the outset
D that the five Member Bench of the Tribunal in its judgment in the case of
Collector of Central Excise Bombay III v. Auxichem reported in 1988 (34)
E.L.T. 637 has exhaustively gone into the entire factual data dealing with
this controversy and has taken the view that silicone preparations are not
silicone but only preparations containing silicone for use in textile
E processing and by their very nature these preparations are akin to surface
active preparations, wetting agents, softeners and as such classifiable under
Item l 5AA of the Central Excise Tariff. As the question for consideration
is of a highly technical nature depending for its answer on the chemical
characteristics of the products on the anvil of scrutiny, the decisions
rendered by the Tribunal which is an expert body on the subject cannot be
F lightly interfered with in appeals unless it is demonstrated that the findings
reached and the conclusions arrived at by the Tribunal are such which no
reasonable man· well acquainted with the subject could arrive at or are
otherwise erroneous in law or based on no evidence. keeping in view these
contours of enquiry in these statutory appeals we may now proceed to deal
G with the main contentions canvassed by learned counsel for the Revenue
in support of its appeals. It was vehemently contended before us that the
five Member Bench of the Tribunal had erred in taking the view that
silicone preparations were covered by Central Excise Tariff Item 15AA
and not Tariff Item I 5A(I) which held the field at the relevant time when
the concerned goods were manufactured and when their exgitability to
H duty was to be considered. Tariff Item l 5A( l) as applicable at the relevant
RELIANCE SILICON (Q PVT. LID."· COLLECTOR, CENTRAL EXCISE [S.B. MAJMUDAR, J.] 50 7

time read as under : A
"l 5A. Artificial or Synthetic resins and plastic materials; and
other materials and articles specified below :

(1) Condensation, Polycondensation and polyaddition Fifty
products, whether or not modified or polymerised, Percent B
and whether or not linear (for example, pheno- ad
plasts, amino-plasts, alkyds, polyallyl esters and valorem
other unsaturated polyesters, silicones);
polymerisation and co-polymerisation products (for
example; polyethylene, polytetrahaloethylenes,
polyisobutylena, polystyrene, polyvinylchloride, C
polyvinyl acetate, polyvinyl chloroacetate and other
polyvinyl· derivatives, polyacrylic and
polymethacrylic derivatives, coumaroneindene
resins); regenerated cellulose; cellulose nitrate,
cellulose acetate and other cellulose esters,
cellulose ethers and other chemical derivatives of D
cellulose, plasticised or not (for example,
collodions, celluloid): vulcanised fibre; hardened
proteins (for example, hardened casein and
hardened gelatin); natural resins modified by fusion
(run gums); artificial resins obtained by
esterification of natural resins or of resinic acids
E
(ester gums); chemical derivatives of natural
rubber (for example, chlorinated rubber, rubber
hydrochloride, oxidised rubber, cyclised rubber);
other high polymers, artificial resins and artificial
plastic materials, including alginic acid, its salts F
and esters; linoxyn."

Relevant Explanations to this Tariff Item read as under :

"Explanation II: In sub-item (1), "Condensation, G
polycondensation, polyaddition, polymerisation and co-
polymerisation products" are to be taken to apply only to
goods of a kind produced by chemical synthesis answering
to one of the following descriptions :-

(a) artificial plastics, including artificial resins ; H
508 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A (b) Silicones;

(c) resoles, liquid polyisobutylene, and similar artificial
polycondensation or polymerisation products.

Explanation III : Sub-item (I) is to be taken to apply to materials in
B the following forms only :-

(a) liquid or pasty (including emulsions, dispersions and
solutions);

(b) blocks, lumps, powders (including moulding powders),
c granules, flankes and similar bulk forms;

(c) waste and scrap.''

Tariff Item I SAA on the other hand reads as under :
D
"I SAA. Organic surface-active agents (other then Twenty
soap); surface-active preparations and washing per cent
preparations, whether or. not containing soap. ad
valorem
A mere look at the Tariff Item I SA shows that if the commodity
E manufactured is artificial or synthetic resin or any plastic material it would
be covered by the sweep of this Item. But the Item goes further and refers
to other materials and articles specified therein. It is, of course, true that
Item I 5A (I) refers to condensation, poiycondensation and poly-addition
products whether or not modified or polymerised and also refers to esters
F and other unsaturated polyesters, silicones. The products prepared out of
silicones by mixing them with other diluting agents like water etc. are not
within the sweep of the said Item. On the other hand if such imported
silicone oil is diluted and mixed with water so that the mixture can be
utilised as organic surface agent or as surface-active preparations and
washing preparations it would be Tariff Item I SAA which would squarely
G get attracted. It has been held by the Tribunal in the judgment under
appeal that silicone oil which was imported by the manufacturers was
mixed with water and other diluting agents and such silicone preparations
prepared by utilising imported silicone oil on which admittedly
countervailing duty was paid under Tariff Item 15A(I) itself, could not be
H considered to have remained silicone itself but would be treated to be
RELIANCES!LlCON(l)PVf LID. ... COLLECTOR,CENTRALEXCJSE[S.B.MAJMUDAR,J.I 509

products almost akin to surface-active preparations, wetting agents, softeners A
and, therefore, liable to be classified under Item 15AA. It has to be kept in
view that the silicone oil which was imported by the concerned
manufacturers was subsequently diluted and mixed and used in the
manufacture of their products, namely, silicone softeners 662 and silicone
AU 331 etc. They manufactured no goods by the process of condensation
and polycondensation etc. Such silicone preparations out of imported B
silicone oil which underwent process of dilution could not be treated to
have remained silicone itself so as to attract Tariff Item 15A(l). The
Tribunal was, therefore, justified in placing the diluted silicone oil and
other preparations from silicone as classifiable under Tariff Item 15AA.
The amendment brought about in 1982 by amending Tariff Item l 5A( I),
in our view, would not make any difference in favour of the Revenue for C
the simple reason that before the amended Item 15A(l) as reproduced
hereinabove would apply it should be shown that by the process of
manufacture undertaken by the concerned respondent-assessees any process
of condensation,, polycondensation and polyaddition was resorted to qua
the concerned silicones. The Tribunal has noted as a matter of fact that the
imported silicone oil which had borne the countervailing duty under Tariff D
Item 15A(l) had not undergone such process of condensaticm,
polycondensation and poly-addition but had only got diluted by addition
of water and other dilutants so as to make it a surface-active agent.
Therefore, such a diluted product as manufactured by the concerned
respondents cannot be brought to tax under Tariff Item 15A(l) but would E
if at all be assessed to excise duty only under Tariff Item 15AA as rightly
held by the Tribunal. We have carefully gone through the judgment of the
five Member Bench of the Tribunal impugned in these appeals by the
Revenue. In para (9) of the judgment under appeal the Tribunal has observed
as under:
F
"9. The only silicones that are assessable under Item 15A are
the synthetic polymers, the first stage when the silicone
product, or if I may call it the undiluted, unmixed silicone
polymer, is produced by synthesis. Generally speaking the
states in which silicone appears are fluids, resins and G
elastomers. From these three so-called primary silicones, a
number of derived products like sealants, rings washers,
adhesives, surface active preparations, encapsulation cement
etc. are obtained. Many of these preparations are in emulsions.
All these preparations have other materials, additives,
emulsifiers ect. added to aid and help in the use of the H
510 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A preparations in the desired industry application."

We do not find any error of law or any perversity in the reasoning
adopted by the Tribunal on the facts of these cases. On the contrary in our
view the decision of the Tribunal is well sustained on the evidence on
record and calls for no interference in these appeals moved by the Revenue.
B
Category (2)

That takes us to. the consideration of appeals by the assessees
comprised in Category (2). So far as these appeals are concerned the main
grievance was voiced by learned counsel for the appellant in Civil Appeal
C Nos. 1942-53 of 1988. The learned counsel submitted that silicone oil
imported by the appellant at the relevant time was governed for the purpose
of customs duty and countervailing duty not by Tariff Item I SA (I) but
by the residuary Item 68 and accordingly it would be covered by Chapter
38 of the Customs Tariff of India 198S-86 which held the field at the
relevant time and would be out of Chapter 39 thereof. So far as this
D contention is concerned a close look at Tariff Item l SA(l) of the Central
Excise Tariff which would be relevant for deciding the countervailing
duty liability of the appellant-importer would be apposite. It is true as
contended by learned counsel for the appellants that the Head Note of
Tariff Item ISA talks of artificial or synthetic resins and plastic materials.
However it also does talk of other materials and articles specified in the
E said Item. Therefore, it is not possible to agree with the contention of
learned counsel for the appellant-importer that other articles and materials
must necessarily partake the character of artificial or synthetic resins or
must be resins of any other type, as that contention would make the wide
phraseology employed in the very same Item in its second part concerning
F other materials and articles specified in the said Item otios and would
denude these words of their real meaning and content. Tariff Item ISA(!)
as noted earlier covers condensation, Polycondensation and poly-addition
products whether or not modified or polymerised and also covers esters
and other unsaturated polyesters silicones. A bare reading of the aforesaid
wordings in Item I SA(J) of the Central Excise Tariff may prima facie
G suggest that only silicone items not in fluid state may get covered by the
sweep of the said Item. However, no doubt in connection with the sweep
of the said Item remains once we turn to Explanations II and Ill as engrafted
in the very same Tariff Item ! SA(J'). To recapitulate Explanation II reads
that in sub-item (I) condensation, polycondensation or poly-addition,
polymerisation, and co-polymerisation products are to be taken to apply
H only to goods of a kind produced by chemical synthesis answering to one
RELIANCESWCON 0)PVT.LTD. ''· CO!llCTOR,CENlRALEXCISE[S.B. MAJMUDAR,J.] 5JJ

of the descriptions enumerated therein which include silicones. Therefore, A
any condensation and polycondensation or poly-addition in connection
which the silicones would bring the article within the sweep ofTa:iffltem
l5A(l ). lf any doubt remains in connection with the physical appearance
of such products containing silicone it is set at rest by Explanation III
which lays down that sub-item (l) of Item l5A is to apply to materials
even in the liquid or pasty forms. Consequently silicone liquid also would B
be covered by Tariff Item l 5A(l) once it has undergone condensation,
polycondensation or poly-addition. Learned counsel for the appellant fairly
stated that it is not his case that silicone liquid which the appellant had
imported had not undergone a process of chemical synthesis by way of
condensation, polycondensation, poly-addition etc. but his submission is
that in the historical background of amended Item l 5A(I) it should be C
held that the said Item along with its Explanations only covered those
types of silicone products which resemble resins. In order to support this
co.ntention he invited our attention to Chapter 39 of Customs Tariff of
India 1985-86 and submitted that Heading 39.01106 covered only resins
and not liquids like silicone oil imported by the appellant. The said Heading
~as~: D
Heading Sub-heading No. and Standard Central
No. description of article . Rate of Excise
duty Tariff
Item
(l) (2) (3) (4) E
39.01/06 Condensation, polycondensation 200% 15A,
and polyaddition products, 15B,
whether or not modified or 16B,
polymerised, and whether or
not linear (for exampie,
phenoplasts, aminoplasts, F
alkyds, polyallyl esters and
other unsaturated polyesters,
silicones); polymerisation and
co-polymerisation products (for
example, polyethylene, G
po I ytetrah aloe thy lenes,
polyisobutylene, polystyrene,
polyvinyl chloride, polyvinyl
acetate, polyvinyl chloroacetate
and other polyvinyl derivatives,
polyacrylic and polymethacrylic H
512 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A derivatives, Coumaroneindene
resins); regenerated cellulose;
cellulose nitrate; cellulose
acetate and other cellulose
esters, cellulose ethers and other
chemical derivatives of
B cellulose, plasticised or.not (for
example, collodions; celluloid);
vulcanised fibre; hardened
proteins for example, hardened
casein and hardened gelatin);
natural resins modified by
c fusion (run gums); artificial
resins obtained by esterification
of natural resins or of resinic
acids (ester gums); chemical
derivatives of natural rubber
(for example, chlorinated
D rubber, rubber hydrochloride,
oxidised rubber, cyclised
rubber); other high polymers,
artificial resins and artificial
plastic materials, including
alginic acid, its salts and esters;
E !inOX)'O.

We cannot appreciate how the said Heading would not cover silicone
oil. Silicone which has undergone process of condensation, polycondensation
and poly-addition is expressly covered by the said Heading. It cannot,
p therefore, be said that the residuary Heading found in Chapter 38 of the
said Customs Tariff which deals with miscellaneous chemical products
not elsewhere specified as indicated in Heading No. 38.01/19 could be
effectively pressed in service by the appellant. So far as the claim of
exigibility to countervailing duty is concerned, as we have shown earlier
Central Excise Tariff Item l5A(I) read with Explanations II and III clearly
G shows that silicone oil imported by the appellant which has undergone the
process of condensation, polycondensation and poly-addition would
squarely get covered by the sweep of the said Tariff Item l SA( l ). The
view taken by the Tribunal in this connection cannot be found fault with.
Learned counsel for the appellant strongly relied upon a decision of the
H Tribunal in the case of Tamil Nadu Electricity Board, Madras v. Collector
RELIANCESlllCON(QPVT. LID.•·. COLLECTOR,CENIRALEXCISE(S.B.MAJMUDAR,J.] 513

of Customs, Madras 1983 (12) E.L.T. 174. The said decision was rendered A
in connection with resins classified under Chapter 39 of the Customs Tariff.
It was held that if the copolymer resin had a special ability to cause exchange
of ions, it could not be regarded as merely artificial resin but as a class of
products which had been given characteristics that made their use appropriate
only in a particular respect and for a particular purpose, namely ion
exchange, rather than as a general purpose resin. On the peculiar facts of B
the case before the Tribunal it was held that the products concerned could
be treated as water treatment chemicals and not as artificial resins so as to
attract Chapter 39 of the Customs Tariff. We fail to appreciate how the
said decision can be of any avail to the appellant on the facts of the present
case, Learned counsel for the appellant next contended that the earlier
Tariff item I SA of the Central Excise Tariff which was earlier pressed in C
service by the appellants and which contention was accepted by the Revenue
was almost identical with the amended Item I SA(!) save and except addition
of some further items but for applicability of Item l 5A( I) it had to be
shown that the concerned product was artificial or synthetic resin or an
article made up therefrom. It is not possible to agree. The whole Tariff
Item l 5A(l) underwent a sea change when it was amended in 1982 and D
came on the Statute Book. The Explanations II and III to this amended
Item were not existing on the Statute Book when earlier Tariff Item 15A(l)
held the field. Consequently it cannot be said that the amended Item 15A
was almost pari materia with the earlier Item I 5A as contended by learned
counsel for the appellant. lt has to be kept in view that for deciding the E
liability to tax the clear wordings of the Item have to be considered and
given effect to when on the express words of the Item the concerned
products get squarely covered by the same reference to the past history of
the said Item as might have existed in a different form prior to its amendment
would lose all its significance and would remain a past event only and
cannot be validly pressed in service for deciding the taxability of the product F
which is covered by the sweep of the amended item. Learned counsel for
the appellant then submitted that artificial resins and plastic materials are
the only items which are in the sweep of amended Item 15A(l). We have
already shown that the sweep of the Item is more comprehensive and
covers materials other than artificial resins and plastic materials. It was G
lastly contended that a Tariff Advice was issued in 1984 by the Additional
Collector of Central Excise, Thane which showed that even after
amendment of Tariff Item I SA of the Central Excise Tariff Polyethylene
Glycol continued to be classifiable under Item No.68 and not under item
ISA(l). The said Tariff Advice is at page 118 of the Paper Book in Civil
Appeal Nos. 1942-53 of I 988. We fail to appreciate how this Tariff Advice H
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
Sl4

A can advance the case of the appellant any further. Polyethylene Glycol
might have been treated to have continued to be classified under Tariff
Item 68 despite amendment of Tariff Item I SA. We are not concerned
with such a product. The short question with which we are concerned is
whether silicone oil imported by the appellant is covered for the purpose
of deciding the countervailing duty payable thereon by Central Excise
B Tariff Item 15A(I) or not. So far as that question is concerned as the
product was imported after the amendment of Tariff Item I SA it is the
amended Item which will govern the same. As we have discussed earlier
the wide sweep of the said Item especially in the light ofthe two explanations
engrafted therein, would clearly cover the article in question. Consequently,
no fault could be found with the view of the Tribunal that the fluid silicone
C oil imported by the appellant was a silicone polymer and, therefore, liable
to be covered for the purpose ofcustoms duty under Customs Tariff Chapter
39 and also assessable to countervailing duty as per Central Excise Tariff
Item !SA(!).

D Category (3)

That takes us to the consideration of two appeals comprised in
Category (3). So far as the Civil Appeal No. 4S3 of 1986 moved by M/s
Reliance Silicon (I) Pvt. Ltd. is concerned, the commodities·manufactured
by them which are in dispute before us are silicone oil and also other
E silicone preparations like emulsions. In view of our discussion while
disposing of Civil Appeals comprised in Categories (I) and (2) it must be
held that silicone oil manufactured by them would squarely be covered by
Tariff item I SA(!) while so far as silicone emulsion and other silicone
preparations are concerned as they are made by using silicone oil or other
components of silicone they would not be covered by Tariff Item I SA( I)
F but would be covered by Tariff Item I SAA. But in no case they would be
covered by Tariff Item 68 which is a residuary Item. The judgment and
order ofthe Tribunal as challenged by the said appellants will stand modified
accordingly by holding that silicone oil simpliciter manufactured by the
appellants would be liable to be taxed under Tariff Item !SA(!) while
G silicone oil emulsions and other preparations containing silicone
manufactured by the appellant will be covered by Tariff Item I SAA and
in either case residuary Tariff Item p8 would not apply. The respondent
authorities are directed to reframe relevant assessments accordingly and
recompute the excise duty payable by the appellant for the relevant period.
So far as Civil Appeal No. 1507 of 1984 is concerned the disputed item
H manufactured by the appellant consists of silicone emulsion manufactured
RELIANCESILICON(nPVT. LID."· COUECTOR,CENffiALEXOSE[S.B.MAJMUDAR,J.] 515

from silicone oil. In view of our discussion in connection with cases falling A
in Categories (1) and (2) and also in the light of our aforesaid findings in
appeal of Mis Reliance Silicon (I) Pvt. Ltd. it must be held that the product
of silicone emulsion manufactured by the appellant is liable to be taxed
under Tariff Item 15AA and not under tariff Item 15A(I). The judgment
and order rendered by the CEGAT dated 2nd December 1983 confirming
the order of the Collector of Central Excise (Appeals) dated 11th March B
\ 983 and the order of the Assistant Collector of Central Excise dated \3th
July 1982 will be liable to be set aside. The respondent-authorities are
directed to reassess the duty liability of the appellant under Tariff Item
I 5AA for the relevant period.

In the result a\I the appeals comprised in Categories (I) and (2) are C
liable to fail and are dismissed while Civil Appeal No.453of1986 comprised
in Category (3) is partly allowed as aforesaid. In this case as detention
order dated 31st January 1986 was based on the order of the Tribunal
which is partly set aside by us the respondent is d.irected to reissue appropriate
detention order, if found necessary, in the ligh~ofrecomputation of excise
duty liability during the relevant period as held hereinabove by us. So far D
as Civil Appeal No.1507 of 1984 is concerned the same is allowed as
aforesaid. There will be no order as to costs in all these appeals.

R.D. Appeals comprised in categories
\ and 2 dismissed and appeals comprised E
in category 3 partly allowed .

.=r