TaxTMI 
TaxTMI 
1991 (1) TMI 323
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....turers of CMC. In their letter dated 27-11-1982 addressed to the Superintendent of Central Excise, Ahmedabad they described the process of manufacture of CMC stating that the process involved two distinct steps. In the first step, cotton linter pulp was treated with caustic soda solution in order to convert cellulose to alkali cellulose : Cell - ONa + H   Cell - CH + NAOH -  2O Alkali Cellulose         Cellulose     Alkali Cellulose was separately collected and a calculated quantity of product was used for the second step, in which alkali cellulose was mixed with sodium monochloroacetate (SMCA) and the sodium salt of the acid (SCMC) was produced: Cell - ONa + ClCH   2 Cell - COOONa O-CH2OONa + NACl SCMC            SMCA          SCMC was then dried, pulverised and blended. It is also known as CMC. The technical grade of CMC produced by CPIL contained 50-54% of active matter. The rest was composed of sodium chloride and some sodium glycolate. If about 2 to 4% increase in ac....
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.... described by the Chief Chemist on the basis of the books available with him. (iii) Based on the opinion of the Chief Chemist and the Chemical Examiner, a show cause notice was issued to CPIL, vide No. V 15A(22)(23)/M/83, dated 26-7-1983, asking them to explain why their product CMC should not be classified as chemical derivative of cellulose covered by the description of Tariff Item 15A(1) of the Central Excise Tariff. Considering their reply to the show cause notice and giving them personal hearing, the Assistant Collector of Central Excise, Division II, Ahmedabad, vide order-in-original No. 38/83, dated 24-8-1983, held that the alkali cellulose produced by CPIL as the first step product was a chemical derivative of cellulose and was classifiable under Tariff Item 15A(1). In the absence of any evidence that the alkali cellulose was neither stable nor marketable, the Assistant Collector rejected their contention of non-marketability. So far as the second stage product CMC is concerned, he held that sodium carboxymethyl cellulose was a chemical derivative not only of alkali cellulose but also of sodium monochloroacetate, and that, therefore, it could not be con....
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....peals) Bombay. This application challenged only that part of the Assistant Collector's Order-in-Original, dated 24-8-1983 in which he had held that the final product CMC was classifiable under Tariff Item 68. (v) The Collector of Central Excise (Appeals), Bombay held that the classification of the CMC manufactured by CPIL under Tariff Item 68 was correct and he dismissed the appeal filed by the Assistant Collector under Section 35E(4) of the Act. The Collector (Appeals) relied on the opinion given by the experts and the consumers of the CMC manufactured by CPIL to the effect that the product was neither "cellulose ether", nor "chemical derivative of cellulose". He also relied on the Trade Notices issued by the Collectorates of Madras and Chandigarh and the circular issued by the Director General of Inspection, Customs & Central Excise, New Delhi classifying CMC under Tariff Item 68. Collector (Appeals) observed that the Assistant Collector who had passed the order-in-original had before him the opinion given by the departmental experts on testing the CMC manufactured by CPIL. The opinion given by the departmental experts was based on technical books on th....
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....d used commercially as a 'thickener'. It could be best described as a 'gum'." The impugned order of Collector (Appeals) has been challenged by the Collector of Central Excise and Customs, Ahmedabad by this appeal. (II) Appeal No. E/1457/86-C (Collector of Central Excise and Customs, Vadodara v. M/s. Ashok Organic Industries Ltd). The respondents, M/s. Ashok Organic Industries Ltd. (hereinafter referred to as AOIL) manufacture sodium salt of carboxymethyl cellulose (in short called 'CMC). In their classification list No. 27/82 effective from 1-3-1982, they claimed classification of CMC under Item 68 of the Central Excise Tariff. A show cause notice dated 26-4-1982 was issued to them by the Department asking them to explain why their CMC should not be classified under Tariff Item 15A(1). After considering their reply to show cause notice, in which their main contention was that CMC was not known to the trade as plastic or synthetic resin, and observing the principles of natural justice, the Assistant Collector of Central Excise, Division IV, Baroda classified the product under Tariff Item 15A(1). Being aggrieved, they filed an appeal before the Collector....
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.... Item 15A(1), does not appear to be correct and needs to be set aside. (III) Appeal No. E/1438/87-C (M/s. Reliance Cellulose Products Ltd. Secunderabad v. Assistant Collector of Central Excise, Hyderabad) (i) The appellants M/s. Reliance Cellulose Products Ltd. (hereinafter referred to as RCPL) filed a classification list on 18-6-1982 classifying their product sodium carboxymethyl cellulose (hereinafter mentioned as CMC) but wrongly describing it by mistake as carboxymethyl cellulose, under Tariff Item 68. The classification list was approved provisionally and the assessments were made provisionally under Rule 9-B of the Central Excise Rules from 1-3-1982. A sample of the product was tested by the Departmental Chemical Examiner, who reported the test result as follows :    "The sample is in the form of a Pale brown powder. It is a sodium salt of carboxymethyl cellulose .... a cellulose ether." RCPL were not satisfied with the test report. They requested for re-test of the sample by the Chief Chemist, CRCL, New Delhi. The duplicate sample lying with RCPL was sent for re-test by the Chief Chemist with their concurrence. Th....
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....ther the product is affected by acids in cold and above all whether the product is sodium carboxymethyl cellulose at all as claimed by them when the test reports clearly and in unequivocal terms indicated that product is composed of sodium salt of sodium carboxymethyl cellulose and the presence of sodium does not in any way affect the classification of the product as cellulose ether. It also appears that the age of sample is no criterion, which effects the composition of the product and is not relevant." (iii) In their reply dated 9-9-1986 to the show cause notice, RCPL challenged the show cause notice stating that it could not be issued without first deciding the issue regarding drawal of fresh sample and sending it to Chief Chemist. They also contended that the earlier test reports of Chemical Examiner and Chief Chemist were not correct, and that CMC was not ether and not classifiable under Tariff Item 15A(1). During the personal hearing before the Assistant Collector on 11-9-1986, their Counsel renewed the request for test of a fresh sample by Chief Chemist and requested for facility of cross-examination of Chemical Examiner and Chief Chemist on the next dat....
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.... mentioned about the test results to the department. Presumably the test results were not in their favour. Thus it may be seen that enough opportunities were given to the company in vindicate their stand in the matter. Samples cannot be sent time and again at the will and pleasure of the company. Acceptance of such a request of the company would defeat the purpose inasmuch as the samples intended to be sent for test may be so arranged to get favourable results also. Moreover, there is a procedure set out under the rules for drawal of samples for test and re-test. Accordingly their contention that the issue cannot be decided without a further test is not correct. The company also raised the issue that the test results given by the Chief Chemist, CRCL, Delhi is not acceptable to them on the ground that the sample is old. The company did not show any evidence on record or otherwise that the composition of sample gets affected due to age. Hence this plea of the company cannot be accepted." (iv) Appeal filed against the above order of the Assistant Collector was decided by the Collector of Central Excise (Appeals), Madras against RCPL vide the impugned Order-in-A....
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....pable of being plasticised and hence it was not covered by Tariff Item 15A(1). Collector (Appeals) observed that "The Tariff Item 15A(1) covered the following : (a) Artificial or synthetic resins (b) Plastic materials (c) Other materials and articles specified in the Tariff. Artificial or synthetic resins are covered by the words 'condensation, polycondensation and polycondensation (it should be polyaddition) products'. Plastic materials are covered by the words 'Polymerisation and co-polymerisation products'. Other materials and articles specified in the Tariff are as under: (i) Regenerated cellulose; (ii) Cellulose Nitrate; (iii) Cellulose Acetate; (iv) Other cellulose Esters; (v) Cellulose Ethers; and (vi) Other chemical derivatives of cellulose, plasticised or not. Besides Tariff includes vulcanised fibre, hardened proteins, natural resins modified by fusion, artificial resins obtained by esterification of natural resins or of resinic acid....
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....1-4-1981 to 31-3-1982); and that they were not entitled to the exemption under Notification No. 80/80-CE and 54/82-CE, dated 28-2-1982. They were asked to explain why Central Excise duty of Rs. 5,64,977.18 on the CMC valued at Rs. 13,45,183.75 cleared by them during the period 28-2-1982 to 10-8-1982 should not be demanded from item under Rule 9(2) of Central Excise Rules read with Section 11A of the Central Excises and Salt Act, 1944 and why penalty should not be imposed on them for contravention of Rules 9(1) and 174 ibid, under Rules 210 and 173-Q of the Central Excise Rules. In computing the above value of clearances, the Superintendent of Central Excise took the highest value available in one invoice No. 139/81-82, dated 7-6-1982 as there was no uniform sale price of the product charged by them. It was also alleged that they filed declaration under Notification No. 111/78-C.E, on 2-8-1982 instead of filing it on or before 14-4-1982, thereby wilfully suppressing information. In reply to the show cause notice the appellants contended that their CMC was not capable of being plasticised and, therefore, it was not covered by Tariff Item 15A(1). They also challenged the Superintenden....
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....peal No. E/131/85-C (M/s. M.C.A. Chemicals Ltd. v. Collector of Central Excise, Hyderabad). The appellants M/s. M.C.A. Chemicals Ltd. (hereinafter referred to as 'MCA') were manufacturing sodium carboxymethyl cellulose (in short CMC), which was classified under Central Excise Tariff Item 68 upto 28-2-1982. After amendment of the Tariff Item 15A by clause 49 of the Finance Bill, 1982, the Department re-examined the classification of the product. A sample of the product was tested by the Chemical Examiner, Madras Custom House, who reported that the sample was in the form of white powder and that it was a carboxymethyl cellulose - a cellulose ether. Based on that test report, the relevant classification list was approved after classifying the product under Item 15A(1), but on appeal filed by MCA the Collector of Central Excise (Appeals), vide his order-in-appeal No. 132/83(H), dated 1-8-1983, directed them to obtain a speaking order from the Assistant Collector. At the request of MCA sample was re-tested by the Chief Chemist, CRCL. The Chief Chemist reported the test result as follows : "The sample is in the form of creamish fluffy powder composed of sodium carboxymethyl cellulose,....
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....ed person". Aggrieved person means an assessee and not Collector or Revenue. Provision for filing an appeal by the Department is Section 35B(2). Appeal under this Section can be filed by Revenue against an order-in-appeal passed by Collector (Appeals) under Section 35A(3) on an appeal filed by an assessee. Section 35A(3) does not relate to appeal filed by the Department under Section 35E(2) read with 35E(4). Advocate Shri Parikh relied on 1984 (15) E.L.T. 275 (Tribunal) - Head Note AIR 1975 S.C. 2097 and 1978 (2) E.L.T. (J 523). 3.1(b). Against this proposition Shri Sunder Rajan's arguments were : (i) Provisions of Section 35A of Central Excises and Salt Act apply to an application made under Section 35E(4) read with Section 35E(2). Once appeal has been taken on record, Collector (Appeals) is bound by the provisions of Section 35A. An "application" is an "appeal". On this point he relied on AIR 1932 P.C. 165. (ii) In AIR 1957 S.C. 540, Supreme Court held that the right of appeal was a vested right. This judgment was followed by Tribunal in para 9 of 1986 (26) E.L.T. 1057 Collector of Central Excise, Baroda v.....
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....its jurisdiction in dealing with such question. (ii) 1967 (63) ITR 67 (S.C.) In that case the Hon'ble Supreme Court held that the question on which a reference was sought was a limited question which did not arise out of the Tribunal's order. The question sought to be raised before the High Court was a new question and was not an aspect of any question raised before the Tribunal, and the High Court was right in rejecting the application under Section 66(2) of the Income-Tax Act. It was also held that it was only a question that had been raised before and decided by the Tribunal that would be held to arise out of its order. In respect of a question which was not raised or argued before the Tribunals or decided by it, a reference under Section 66(2) could not be asked for. (iii) 1966 (62) ITR 458 (S.C.) In the said case following the earlier judgment in the case of Commissioner of Income Tax v. Scindia Steam Navigation Co. Ltd, reported in 1961 (42) ITR 589, the Hon'ble Supreme Court held that the High Court had rightly pointed out that the question sought to be raised did not arise out of the order of the Tribunal and was not the subject matter of reference to the High C....
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....hich was served on the Collector, and not all questions of law irrespective of whether they arise out of the order or not. (viii) Tribunal's order Nos. 592-595/89-C, dated 12-10-1989 in the case of Sarabhai Chemicals Ltd. and Others (paras 55, 60 to 63). Advocate argued that in Sarabhai Chemicals' case it was held that the point 'therapeutically Inert' was not raised and dealt with at the level of lower authorities, could not be raised under Section 35E(2). In the present case the authorisation at page 47 did not deal with the question whether CMC is a "chemical derivative of cellulose" (it raised whether CMC is cellulose ether) and hence this point, i.e. chemical derivative of cellulose, cannot be raised now. The present appeal is confined to determination whether CMC is cellulose ether. Advocate relied on 1989 (42) E.L.T. 3 (Tribunal) in the case of Collector of Central Excise v. Oswal Vanaspati and Allied Industries, which held that the appeal should be confined to the ground stated in the authorisation. Preliminary Objection No. 3 3.2 (b) On this objection, Shri Sunder Rajan's arguments are that cellulose ether and chemical derivative of cellulose are both cove....
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....ise this ground now. The principle of estoppel should apply. He relied on Madras High Court judgment in the Writ Petition No. 319 of 1974 (M/s. Lucas TVS Ltd. v. Assistant Collector of Customs and Others), copy of which was filed by him in the Court. It was held in that case that the litigant would be prevented from reagitating the same cause of action which he voluntarily gave up at a time when he ought to have pursued it. 4. Arguments on merits, in appeal No. E/1450/86-C 4.1 Arguments of Shri Sunder Rajan. JDR (I) Collector (Appeals) ignored the technical authorities produced by the Assistant Collector of Central Excise, but relied on the affidavits of some experts filed by the assessee (CPIL). Collector (Appeals) discarded the technical books, but at the same time followed experts' affidavits which are based on technical books. Although he held that technical meaning should be considered along with the trade parlance, he has not actually followed this principle. In view of the provision of Rule 215(c) of Central Excise Rules, Collector (Appeals) should not have accepted new evidence without giving opportunity to the Revenue (Executive Collector) to ....
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....icular ether is prepared from alkali cellulose by reaction with the sodium salt of chloracetic acid in a sigma blade mixer. When the reaction is completed the excess of sodium hydroxide is neutralized and the water soluble product precipitated with alcohol and washed with aqueous methyl alcohol. The degree of substitution achieved commercially is usually about 0.7 ether groups per glucose unit, and this type of sodium carboxymethyl cellulose is water soluble." (vi) Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, Pages 51-52, discusses carboxymethyl cellulose in the following terms : "Carboxymethyl cellulose. A water-soluble cellulose derivative. Sometimes called cellulose gum, made by impregnating cellulose with caustic soda (NaOH) and reacting the mixture with sodium monochloroacetate, to give a product which is a sodium salt of carboxylic acid ROCH2COONa (where R stands for cellulose). The molecular weight may run as high as half a million. This material has many useful colloidal properties. Its solubility in water makes it uniquely applicable in food products ....
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....c entry should prevail over the generic entry. For this, Shri Sunder Rajan relied on the following decisions: (i) 1983 (13) E.L.T. 1566 (S.C.) (Paras 36 and 37) - Dunlop India Ltd. & Madras Rubber factory Ltd. v. Union of India and others (ii) 1989 (40) E.L.T. 287 (S.C.) (Paras 17 & 20) - Collector of Central Excise v. Jayant Oil Mills Pvt. Ltd. (iii) 1985 (20) E.L.T. 89 (Tribunal) (Para 31) - Collector of Customs, Bombay v. J.K. Batteries. (III) The ratio of the decisions relied on by the learned Departmental Representative are as follows : (i) 1988 (34) E.L.T. 643 (Tribunal) Collector of Customs, Bombay v. Hico Products Ltd. Classification of slicone oil/fluids was in dispute in this case. The Larger Bench of the Tribunal held in the case that silicone was specifically mentioned in the Customs Tariff Heading 39.01/06 and Item 15A(1) of the CET. Therefore, assessment of the product must be made under this Heading, namely, Chapter 39 of the Customs Tariff and Item 15A of the Central Excise Tariff. (ii)....
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....ictionary by Gessner G. Hawley, 10th Edition, Pages 268-269, it has been stated that "A compound is a homogeneous entity in which the elements have definite proportions by weight, and are represented by a chemical formula (q.v). A compound has characteristic properties quite different from those of its constituent elements; it can be decomposed by energy in the form of a chemical reaction (q.v), of heat, or of an electric current. Example: Water is a liquid formed by chemical combination of two gases; it can be separated into hydrogen and oxygen by an electric current (electrolysis); ......" (iv) In the Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, Second Edition, page 137, the term "homogeneous" has been explained as "derived from homo ("the same") and gen ("kind"). This term is properly applied to chemical elements and compounds but not to mixtures or solutions. For example, pure water is homogeneous, whereas, gasoline is not; nitrogen is homogeneous, but air is not;........ A compound can be sub-divided or decomposed only by a chemical or electro-chemical reaction, the products of which are different from the starting substance, whe....
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.... that CMC was correctly classifiable under Tariff Item 68, Shri Dhiwan cited the following past decisions: (a) 1985 (21) E.L.T. 410 (Delhi) J.K. Synthetics Ltd. v. Collector of Central Excise, Delhi. In paragraph 70 of the judgment the High Court observed that the test was whether the polyester chips obtained by the petitioner company in that case were usable or were known in common parlance to the market as plastic by the persons concerned in trade with it. Shri Dhiwan argued that in the present case the respondents' CMC was not plasticised nor was it capable of being plasticised. It was not used as plastic material. (b) 1982 (10) E.L.T. 790 (GOI) In Re : Tulsi Fine Chemical Industries P. Ltd. It was held by the Government of India that Ion Exchange resins having resinous properties were classifiable under Item l5A(l)(ii) of Central Excise Tariff, failing which they would be liable to duty under Item 68 ibid. (c) 1980 (6) E.L.T. 728 A (GOI) In Re : Jamnagar Cable Industries, Jamnagar. Government of India accepted the petitioners' arguments that capability and design for a particular use should b....
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....ures of such products with any other article or material would take the mixture outside T.I. 15A(1). The product of the appellant, viz. SCMC, is a mixture of CMC and glycolic compounds and salt. So, it would not fall under Tariff Item 15A. (a) 1981 (8) E.L.T. 108 (Delhi) Para 14 (b) 1989 (40) E.L.T. 424 (Tribunal) Paras 4 & 5 (c) 1987 (32) E.L.T. 616 (Tribunal) (d) 1985 (22) E.L.T. 3 (S.C.) (e) 1989 (40) E.L.T. 129 (Tribunal) (iv) CMC a not being a plastic or resin does not fall under T.I. 15A. (a) 1989 (44) E.L.T. 518 (Tribunal) Para 13 (b) 1988 (35) E.L.T. 635 (Tribunal) (c) 1988 (34) E.L.T. 643 (Tribunal) Paras 3, 13, 14, 17 (d) 1988 (35) E.L.T. 637 (Tribunal) (v) CMC is modified cellulose. Since modified cellulose is not specifically mentioned in T.I. 15A, it cannot be classified under this Tariff Item: (a) 1984 (15) E.L.T. 434 (Tribunal) Para 16 (b) 1981 (8) E.L.T. 82 (GOI) Paras 19 to 23 (vi) Test reports are binding. Chief Chemist opined that CMC is not an ether. Department is bound by this. (a) 1984 (15) E.L.T. 407 (Mad) Para 6 end. (b) 1987 (30) E.L.T. 482 (Tribunal)....
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....se ether was specifically mentioned in Tariff Item 15A(1) prior to 1-3-1982, when the appellants' product was classified under Tariff Item 68. So, it could not be said that the same product became cellulose ether with effect from 1-3-1982 and could be classified under Tariff Item 15A(1). (ii) Chemical examiner's test report of the appellants' product said that it was a "sodium salt of carboxymethyl cellulose. Carboxymethyl cellulose is a cellulose ether". Sodium is required to be removed from the appellants' product to get carboxymethyl cellulose. But sodium salt of carboxymethyl cellulose (SCMC) is loosely called as carboxymethyl cellulose (CMC). Sodium salt of carboxymethyl cellulose was not mentioned in the Tariff Item 15A(1). SCMC is an earlier stage for the manufacture of CMC. The stage of CMC is not reached by the products of any of the three appellants represented by him. Further, the intermediate product alkali cellulose is not obtained by these three appellants; alkali cellulose is formed in SITU, which could not be taxed. (iii) The appellants' SCMC is neither a cellulose ether nor a derivative of cellulose. Hence, it was not....
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....tem 68. He had no jurisdiction to review his own approval of classification list. Thus, the original order in that case is liable to be set aside. 7. The learned Advocate Shri Joggaya Sharma filed a written note giving his further submissions on behalf of M/s. Sridevi Chemicals and M/s. Kalpana Chemicals (P) Ltd., in which it was stated, inter-alia, that their sodium carboxymethyl cellulose was a mixture of several products and not a single compound. It was formed by elements chemically united in indefinite proportions, as the completion of reaction substitution varied between 0 (no reaction) to 0.8 (maximum technically achieved degree of substitution of any molecular chain). It was not a plastic and was not capable of being plasticised. It was soluble in water and was not used as plastic. Only those ethers and cellulose derivatives, which achieved complete reaction and the degree of substitution reached 3, were classifiable under item 15A(1). Ether structure should correspond to the formula ROR; the appellants' product did not satisfy this requirement. Hence it was not covered by Tariff Item 15A(1). 8. Appearing for M/s. Ashok Organic Industries, respondents in App....
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....CMCs where etherification was complete or at least advanced substantially could be classified as ether. ISI specification IS-5306 of 1978, para 0.3 gives specification for sodium carboxymethyl cellulose, food grade. Irrespective of degree of substitution, CMC is ether. Chief Chemist reported that it was a cellulose derivative. (iii) Proposition (III) that SCMC was a mixture of CMC and glycolic compounds and salt and such mixture was outside the purview of Tariff Item 15A(1), had no basis. Tariff Item 15A(1) mentioned "other materials". "Other materials" need not be condensation products . (iv) The fourth proposition that the CMC not being plastic or resin did not fall under Tariff Item 15A had no basis. In that Tariff Item, there was no requirement that "other materials" should be plastic . The Larger Bench decision of the Tribunal in the case of Hico Products Ltd. - 1988 (34) E.L.T. 643 (Tribunal) had already settled this issue. It was held that silicone was specifically mentioned in Tariff Item 15A(1) of the CET and hence, silicone oil/fluid must be assessed under that tariff item. Cellulose ether and cellulose derivative being specifical....
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.... definite molecular weight. His clients' products had no definite molecular weight. Scientific meaning should be given in classifying the goods under Tariff Item 15A. In the present case, the disputed products were soluble in water, whereas ether was not soluble in water. In the case of difference of opinion between the experts, the benefit should go to the assessee. The experts were not produced by the Department for cross examinations. 12. Shri Sunder Rajan disputed the contention raised in the written note filed by the learned Advocate in Appeal No. E/131/85-C that their product was not a chemical derivative of cellulose. 13. We have considered the arguments put forward by the appellants, the written submissions filed by various parties, the authorities cited by them, technical literature referred to by them and the preliminary objections raised by some of them. The main question before us is whether the substance referred to as CMC is an ether and is classifiable under T.I. 15A(1) or under T.I. 68 of the Central Excise Tariff. Before examining this main question, we dispose of the preliminary objections raised by M/s. CPIL, in appeal No. E/1450/86-C. 13.1&ems....
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.... relied on by the ld. Advocate in paragraph 3.2(a) of this order. However, the ratio of the Tribunal's judgment in Sarabhai Chemicals is not relevant to the facts of this matter. The ld. Departmental Representative cited the Tribunal's decision in Northern Plastics' case. But the ld. Advocate has rightly contended that in the said case no show cause notice was issued and in the last but one sentence of para-43 of the said decision, the Tribunal observed that the phrase 'point arising out of the decision' refers to the commissions and omissions so far as they are relevant and relate to facts and aspects of the matter before the Collector. In the present case, the aspect whether CMC is "Cellulose Ether" was not before the Asstt. Collector. Hence, that decision cannot be followed in the present case. In the present case, the order under Section 35E(2) and the application under Section 35E(4) have gone beyond the show cause notice and the Asstt. Collector's order. The argument of Shri Sunder Rajan that "cellulose' ether" and "chemical derivative of cellulose" are both classifiable under Tariff Item 15A(1) and this Classification was alleged in the show cause notice, does not fulfil the....
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.... this argument advanced before us. 14.2  Shri Sunder Rajan also referred to the book "Polymer Technology" by D.C. Miles and J.H. Briston. In the extract filed by him, of page 444 of this book, sodium carboxymethyl cellulose is mentioned as an ether. It is also mentioned that the degree of substitution achieved commercially is usually about 0.7 and at this type of sodium carboxymethyl is water soluble. 14.3 CMC is also discussed in another publication cited by Shri Sunder Rajan (Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, Pages 51-52) This publication refers to CMC as water-soluble cellulose derivative. However, this publication does not talk of CMC as an ether. 14.4  Shri Sunder Rajan referred to Encyclopaedia of Chemical Technology by Kirk-Othmer, Third Edition. At page 144 of this book, sodium CMC is shown under the heading "water soluble cellulose ether" and at page 145 the same book states that sodium CMC is an anionic cellulose ether manufactured by reaction of monochloroacetic acid, as either the acid or the sodium salt, and alkali cellulose. 14.5 We however reject the learned JDR's reliance on BTN as it had no relev....
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....tem 15A(1). (v) rade Notice dated 14-5-1985 issued by Hyderabad Central Excise Collectorate and the Director General of Inspection, Customs and Central Excise's Circular letter of January, 1985 classified CMC under Item 68 of the CET. (vi) rguing for M/s. Reliance Cellulose Products Ltd., Shri Joggaya Sharma stated that prior to 1-3-1982 CMC was classified under Tariff Item 68 and not Tariff Item 15A(1). Cellulose ether was specifically mentioned in Tariff Item 15A(1) prior to 1-3-1982 and also after 1-3-1982 . Therefore, it could not be said that the same product became cellulose ether from 1-3-1982 and could be classified under Tariff Item 15A(1) from that date. He also argued that sodium was required to be removed from the appellants' SCMC (sodium salt of carboxymethyl celluloses) to get CMC. Since sodium salt of carboxymethyl cellulose was not mentioned in Tariff Item 15A(1), it was not classifiable under that entry. According to him, SCMC is neither a cellulose ether nor a chemical derivative of cellulose. 16. We proceed to deal with these contentions as follows. To appreciate the above contentions, it is necess....
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..... Explanation II : This item does not include: Polyester films; (a) electrical insulators or (b) electrical insulating fittings or parts of such insulators or insulating fittings. From 1-3-1982 : 15A ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC MATERIALS; AND OTHER MATERIALS; AND ARTICLES SPECIFIED BELOW : Fifty percent Ad valorem Condensation, polycondensation (1) and poly-addition products, whether or not ad valorem modified or polymerised, and whether or not linear (for example, pheno-plasts, amino-plasts, alkyds, polyallyl esters and other unsaturated polyesters, silicones); polymerisation and co-polymerisation products (for example, polyethylene, polytetrahaloethylenes, polyiso-butylene, polystyrene, polyvinyl chloride, polyvinyl acetate, polyvinyl chloroacetate and other poly-vinyl derivatives, polyacrylic and poly-methacrylic derivatives, counmaroneindene resins); regenerated cellulose; cellulose nitrate, cellulose acetate and other cellulose esters, cellulose ethers and other chemical derivatives of cellulose, pl....
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....s and plastic materials". Sub-item (1) of Tariff Item 15A listed the various materials under three clauses (i), (ii) and (iii) which were to be subjected to central excise duty. The opening sentence of sub-item (1) of Tariff Item 15A, viz., "The following artificial or synthetic resins and plastic materials ..........., namely", clearly indicates that only those materials which were mentioned in clauses (i), (ii) and (iii) were to be taxed under Tariff Item 15A(1). Cellulose ether and esters do not figure in any of these three clauses. It means that it was not the intention of the Legislature to tax cellulose esters and ethers under Tariff Item 15A(1). 16.2 Tariff Item 15A was restructured with effect from 1-3-1982. In this amended Tariff, effective from 1-3-1982, "cellulose ethers" and "other chemical derivatives of cellulose", whether plasticised or not, were specifically mentioned in sub-item (1) of Tariff Item 15A. This shows that the intention of the Legislature was to charge duty on "cellulose ethers" and "chemical derivatives of cellulose" from that date. The entry makes it clear that cellulose ethers and chemical derivatives of cellulose are liable to excise duty ev....
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....hemist, CRCL is binding on RCPL. Sample of the product manufactured by M/s. Kalpana Chemicals Pvt. Ltd. was tested by the Chemical Examiner of Madras Custom House. His test Report showed that the product was cellulose ether. This test report was not challenged by the company. It is binding on them. In the case of M/s. Sridevi Chemicals (Appeal No. ED/SB/1631/83-C), the Collector observed that the assessee had not contested the fact that their product was a cellulose derivative. Sample of the CMC manufactured by M/s. MCA Chemicals Ltd. was tested by the Chemical Examiner, Madras Custom House, who reported that the same was a cellulose ether. At the request of the assessee, sample was retested by the Chief Chemist, CRCL and he reported that it was a variety of cellulose derivative. The test report of the Chief Chemist was not challenged by the assessee and it is binding on them. In the light of these discussions, it has to be held that the classification of the products manufactured by the assessees in these appeals should be decided in accordance with the test reports of the Departmental Chemist/Chief Chemist and the technical authorities relied on by the learned Departmental Repres....
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....lished that the products in question are cellulose derivative/cellulose ether. 18.2 Shri Joggaya Sharma, learned Advocate argued that the product of RCPL is SCMC (Sodium carboxymethyl cellulose) which is one stage earlier than CMC (carboxymethyl cellulose). According to him, sodium is required to be removed from SCMC to get CMC. He has argued that sodium carboxymethyl cellulose was not mentioned in Tariff Item 15A(1) and this is another reason why the product of RCPL should not be classified under that Tariff Item. This argument is not acceptable. At page 144 of Polymer Technology by D.C. Miles and J.H. Briston, sodium carboxymethyl cellulose is described as an ether. It says : "sodium CMC - This particular ether is prepared from alkali cellulose by reaction with sodiun salt of chloroacetic acid in sigmablade mixture." According to Material and Technology by Longman J.H. Dedussy, sodium carboxymethyl cellulose often abbreviated as SCMC or CMC is hydroxy group of D-glucose units of the cellulose polymer chian reacted to form a carboxymethyl ether. 18.3  These two authorities clearly show that SCMC is an ether. We do not consider it necessary to cite any other a....
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....is to be made on scientific and technical meaning of the product. The learned Advocate has contended that the classification of the goods under Tariff Item 15A should be done in accordance with trade parlance and he has cited several decisions. But in a recent judgment in the case of Akbar Badruddin Jiwani v. Collector of Customs, decided on 14-2-1990 and reported in 1990 (47) E.L.T. 161 (S.C.), the Hon'ble Supreme Court held as follows :- "It is, of course, well settled that in taxing statute the words used are to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given only in cases where the word in the Tariff Entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the tariff entry and any other entry in Tariff Schedule." (Para 53 of the judgment)" The words in Tariff Entry 15A(1) have been used in scientific or technical sense. In the case of Chemicals and Fibres India Ltd. v. Union of India and others, reported in 1982 (10) E.L.T. 917 (Bom.), it was held by Hon'ble Bombay High Court that Tariff Item 15A(1) is highly technical and scientifi....