Jyoti Balasundaram, Member (J)

1. The issue for determination in this appeal is whether the caprolactum recovered from nylon polymer waste by the process of depolymerisation is exempt from payment of excise duty by virtue of Notification 36/85-C.E., dated 17-3-1985 which exempts such Caprolactum recovered by the process of recycling.

2. The appellants manufacture among other goods, nylon yarn and from the nylon polymer waste, recover caprolactum by depolymerisation. Exemption was granted to such Caprolactum vide Notification 18/84 dated 1-3-1984 and Notification 36/85 dated 17-3-1985.

3. The order challenged in the appeal held that depolymerisation process is different from recycling process and therefore the caprolactum recovered by depolymerising nylon polymer waste is not entitled to the benefit of the exemption notifications and levied duty of Rs. 20,78,601.30 and imposed a penalty of Rs. 5 lakhs.

4. We have heard Shri R. Santhanam for the appellant and Smt. Zutshi for the respondent.

5. The first contention put forth by the appellants is that the demand for duty for the period December 1984 to February 1986 is barred by limitation as the show cause notice was issued on 14-1-19