TaxTMI 
TaxTMI 
1991 (1) TMI 323
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.... 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 active matter was observed in the formulation, for the purpos....
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....sp; 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 considered as a chemical derivative of cellulose and hence it would not fall under Tariff Item 15A....
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.... 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 the subject of manufacture of CMC and the Assistant Collector who passed the order-in-original considered the techn....
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....eals) 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 of Central Excise (Appeals), Bombay. Further contentions made before the Collector (Appeals) were that : (a) &nb....
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.... 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. The Chief Chemist reported the test result as follows : "Sample is in the form of a pale brown powder. It is composed of sodium salt of carboxymethy....
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....ly 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 date of hearing. Assistant Collector passed his order-in-original dated 14-10-1986 classifying CMC under Tariff Item 15A(1) and directing RCPL to pay differential duty from....
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....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-Appeal No. 26/87(H), dated 30-1-1987. He held that the classification had been made under Chemical tests, made repeatedly by the proper authority under Rule 56 of the Central E....
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....p; 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 acids, chemical derivatives of natural rubber, etc. In other words, the tariff does not cover only plastic materials or materials having the characteristics of plastics, but also other materials like chemica....
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....n 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 Superintendent's action to adopt the highest sale price as per one single invoice in computing the value of clearances and said that they did not exceed the value limit laid down in the Notifications. In the impugned ord....
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....ulose (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, together with sodium chloride and glycolic compounds (impurities). It is a variety of cellulose derivative. The percentage of active matter (sodium car-boxymethyl cellulose) content of the sample is 47.7 by weight.....
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....ssed 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. Sarabhai Chemicals. This right cannot be taken away. Right of appeal should be literally construed. He relied on: AIR 1938 P.C. 175 at Page 178 1980 ITR 395 at page 397 1961 ITR 123 1982 (134) ITR 601 (M.P.) at page 605 (iii)&nbs....
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....ought 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 Court. Hence the appeal of the assessee was dismissed. (iv) 1988 (33) E.L.T. 176 (Tribunal) This decision related to a reference application filed before the Tribunal under Section 82B of the Gold (Control) Act, 1968. While disposing of the reference application, th....
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....abhai 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 covered by Tariff Item 15A(1). Both are specifically mentioned in the Tariff of the relevant period. There is no change in the allegation that the product CMC is classifiable under Item 15A(1). This allegation of the Department is right from the stage of show cause notice upto the present stage....
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....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 rebut the same. AIR 1957 Calcutta 50 is cited in support of his argument that Collector (Appeals) could not rely on the affidavits and consumers' certificates which were additional evidence. (II) Authorities cited by the learned JDR in support of the contention that CMC is cellulose ether and chemical d....
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.... 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 where it acts as a thickner and stabilizer of emulsions. It is also used in detergents and as a coating agent for paper and textiles. It is one of the most widely used of the many types of modified cellulose." (vii) Encyclopaedia of Chemical Technology by Kirk-Othmer, Third Edition. &nb....
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.... 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) 1988 (35) E.L.T. 635 (Tribunal) - CEAT Tyres of India v. Collector of Customs, Bombay. In this case also the Tribunal took a similar view in respect of classification of silicone fluid as in the earlier case reported in 1988 (34) E.L.T. 643. (iii) 1983 (13) E.L.T. 1566 (S.C.) - Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India....
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....eat, 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, whereas mixtures can be separated into their components by physical means such as evaporation, distillation, filtration, etc." 5.2. CMC is not homogeneous. Reactivity is available in the product. It is not a compound. So, it is not an ether. (i) In Glossary of Chemical Terms by Clifford A., Hampel and Gessner G. Hawley, 2nd Edition, Page 100, ether has been defined as ....
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....ce 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 be the deciding factor for claiming benefit of notification No. 173/68 without insistence on proof of actual use. (d) 1988 (34) E.L.T. 643 (Tribunal) Collector of Customs, Bombay v. Hico Products Ltd., Bombay ( Paras 4, 6 & 7). In para 6 of -the decision it was observed by the Tribunal that "if the resin does not behave like a resin, but has properties that a resin does not have or has applicatio....
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....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) Head Note 2 (c) 1989 (44) E.L.T. 147 (Tribunal) (d) 1985 (20) E.L.T. 257 (Mad) Para 7 (vii) Goods should be classified under T.I. 15A in accordance with trade parlance. Decisions in support of this proposition : (a) 1983 (13) E.L.T. 1566 (S.C.) = AIR 1977 S.C. 597 Paras 31, 36, 38 (b) 1985 (21) E.L.T. 410 (Delhi) (c) 1988 (35) E.L.T. 346 (S.C.) Para 5 (d) 1988 (35) ....
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....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 classifiable under Tariff Item 15A(1). Even in 1985, the Department classified SCMC under Tariff Item 68, vide Directorate of Inspection, Customs & Central Excise Circular No. 2687/2/81, date January, 1985. The Department is, therefore, estopped from classifying it under Tariff Item 15A(1). In support of this argument, para 12 of Supreme Court judgment reported in 1985 (22) E.L.T. 306 (S.C.) - (Union of India v. Godfrey Philips) has been cited. SCMC was not classifiable under item 15A(1). In 1984 (16) E.L.T. 332 (Collector of Central Excise, Bo....
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....tion 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 Appeal No. E/1457/86-C, Shri K.R. Patel, learned Advocate adopted the arguments of Shri Anil Dhiwan, learned Advocate in Appeal No. E/1450/86-C. 9. In reply to the arguments of Shri Anil Dhiwan, Shri Sunder Rajan argued as follows: 9.1 There was no contradiction between the chemical test reports of the Chemical Examiner and the Chief Chemist. The basis of classification was the Chief Chemist's report. Chief Chemist's opinion had not been challenged. In the case of M/s. Cellulose Products Ltd., alkali cellulose was manufactured as an intermediate ....
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....ls" 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 specifically mentioned in Tariff Item 15A(1), they must be classified under that item and could not be shifted to residuary Item 68. (v) There was no basis for the fifth proposition that CMC was a modified cellulose and since modified cellulose was not specifically mentioned in Tariff Item 15A, it could not be classified thereunder. Modified cellulose was covered by Tariff Item 15A(1). (vi) The seventh proposition that Tariff Item 15A products should be classified in accordance with trade parlance was not correct. Trade parlance was not ap....
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....oduct 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 The first preliminary objection raised on behalf of the respondents was that the Revenue's appeal was not maintainable as there cannot be any appeal against an order passed by the Collector (Appeals) under Section 35E. The ld. Advocate relied on a Judgment of the Tribunal in Collector of Customs v. N.P. Unrao reported in 1984 (15) E.L.T. 275 (Tribunal) and to a Supreme Court Judgment as also to a judgment of the Tribunal in 1978 (2) E.L.T. 523. We have perused the case law and find that neither the Supreme Court judgment nor the judgment in 1978 (2) E.L.T. 523 has examined the provision....
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.... 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 above legal requirement. Following the ratio of the case law relied upon by the ld. Counsel for the Respondents and the language employed in Section 35E(2) and 35E(4), we are of the opinion that the ground taken up before the Collector (Appeals), that is to say, whether CMC is cellulose ether or not, was not permissible. Consequently, the Collector (Appeals) acted without jurisdiction in allowing/deciding the said ground. As a result thereof, his findings recorded on the issue as to whether CMC was a cellulose ether or not, was without jurisdiction. In view of this, the present appeal file....
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....o 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 relevance either in law or in practice, to the Central excise Tariff at the relevant time. 14.6  On the other hand Shri Anil Dhiwan, the learned Advocate in appeal No. 1450/86-C argued, on the basis of technical literature, that CMC is not an ether. We are aware that we have dismissed this appeal filed by Revenue on the basis of a preliminary objection. But other respondents/appellants adopted his arguments. Therefore, we refer to his arguments though as far as the respondents are concerned the appeal No. 1450/86-C stands dismissed. 14.7 We have referred in detail to Shri Anil Diwan's argument in pa....
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....lose 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 necessary to reproduce Tariff Item 15A(1) prior to 1-3-1982 and from 1-3-1982. The same were as follows : 15A(1) prior to 1-3-1982 Tariff Item No. Description of goods     Rate of duty Special Excise Basic 15A ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC MATERIALS AND CELLULOSE ESTERS AND ETHERS, AND, ARTICLES THEREOF - The following artificial or (1) synthetic resins and plastic materials, and cellulose esters and ethers, in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, namely : 50%   Ad val....
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....; 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, plasticised or not (for example, collodions, celluloid); vulcanised fibre; hardened proteins (for example, hardened casein and hardened gelatin); natural resins modified by fusion (run games); artificial resins obtained by esterification of natural resins or of resinic acids (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 and esters; linoxyn. Articles of materials described in sub-item (1), the following, 2. namely : Boards, sheeting, sheets, and films, whether lacquered or metallised or l....
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....ether 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 even though these are not plasticised. The contention of the learned Advocates that the CMC is not plasticised and not capable of being plasticised, and hence not classifiable under Tariff Item 15A(1), is not acceptable. It is also incorrect to say that amongst the cellulose derivatives, only collodion and celluloid are covered by Tariff Item 15A(1). According to the Tariff description w.e.f. 1-3-1982, cellulose ethers and other chemical derivatives of cellulose, whether plasticised or not plasticised, were covered by this Tariff Item. Collodions and celluloid were mentioned "for examples." 17. The opinions of the experts were relied upon by CPIL and by Collector (Appeals) in the case covered by Appeal No. E/1450/86-C. According to these opinions, CMC produced by the assessee was "modified cellulose". It has been argued by the learned ....
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.... 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 Representative, which have been cited and discussed in this order earlier (vide paragraph 4.1(II), and not on the basis of the opinion expressed by certain outside agencies. These technical authorities have described CMC as cellulose ether and chemical derivative of cellulose. 18.  The point on which the learned Advocates have emphasised on behalf of the assessees is that fully reacted ether having the degree of substitution 3.0 was classifiable under Item 15A(1) of the tariff; the degree of substitution of CMC is 0.4; CMC is not a compound; it does not conform to the formula ROR; it was therefore, not an ether to be classifiable under Tariff Item 15A(1). The fact remains that the Tariff Item 15A(1) did not stipulate any degree of substitution of the cellulose ether nor did it lay down that fully reacted ether with degree of substitution 3.0....
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....ial 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 authority in support of this conclusion. Further, as already discussed earlier, the product of RCPL was chemically tested and the test report of Chief Chemist revealed that the product was "a cellulose ether which is one variety of cellulose derivative." On the other hand, the learned Advocate has not cited by authority in support of his contention. In the circumstances, his contention is rejected. 18.4  One of the argument advanced before us on behalf of the assesses in that alkali cellulose is a derivative of cellulose; CMC is manufactured from alkali cellulose. Alkali cellulose is an intermediate stage in the process of manufacture of CMC from the starting raw material cotton linter pulp. While in the case of CPIL alkali cellulose comes into existence as an intermediate product and is then collected and converted into SCMC, in the case of RCPL, ....
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....ra 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 scientific in Character and hence the classification under this item should be governed by the technical and scientific meaning. This view was also held by this Tribunal earlier in the case of Collector of Central Excises and Customs, Pune v. General Pharmaceutical Pvt. Ltd., Pune, reported in 1986 (26) E.L.T. 1050 (Tribunal). Supreme Court judgment in Akbar Badruddin Jiwani's case (supra), being, the latest one on point of time, should be followed in preference to the other earlier judgments cited by the learned Advocate. Following the judgment of Supreme Court In Akbar Badruddin Jiwani's case, Bombay High Court judgment reported in 1982 (10) E.L.T. 917 (Bom) and the earlier decision of this Tribunal (supra), we hold that the classification of CMC should be governed by technical and scientific meaning and not by the trade parlance. Technical books say that CMC is ether and....