JUDGMENT

Mrs. Sujata V. Manohar, J.-These appeals and the transferred appeal raise a common question: whether polymer chips manufactured by the assessees 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 setting out the facts in relation to the transferred appeal pertaining to M/s. Nirlon Synthetic Fibres and Chemicals Ltd.

2. At all material times the company manufactured nylon yarn, a synthetic man-made fibre 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