1991 (1) TMI 323 - AT - Central Excise

Summary

Issues Involved: Classification of Sodium Carboxymethyl Cellulose (CMC) under Central Excise Tariff Items 15A(1) or 68.

Summary:

Issue 1: Classification of CMC for M/s. Cellulose Products of India Ltd. (CPIL)
- CPIL claimed CMC under Item 68. The Assistant Collector classified alkali cellulose under 15A(1) and CMC under 68. The Collector (Appeals) upheld this, citing expert opinions and trade notices.
- The Tribunal dismissed the Revenue's appeal, agreeing that the point of CMC being a "cellulose ether" was not raised before the Assistant Collector and thus could not be considered under Section 35E(4).

Issue 2: Classification of CMC for M/s. Ashok Organic Industries Ltd. (AOIL)
- AOIL claimed CMC under Item 68. The Assistant Collector classified it under 15A(1). The Collector (Appeals) upheld 68, based on expert opinions and trade notices.
- The Tribunal allowed the Revenue's appeal, restoring the Assistant Collector's order classifying CMC under 15A(1).

Issue 3: Classification of CMC for M/s. Reliance Cellulose Products Ltd. (RCPL)
- RCPL claimed CMC under Item 68. The Assistant Collector classified it under 15A(1). The Collector (Appeals) upheld this classification.
- The Tribunal rejected RCPL's appeal, affirming the classification under 15A(1) based on chemical test reports and technical literature.

Issue 4: Classification of CMC for M/s. Kalpana Chemicals Pvt. Ltd.
- The Assistant Collector provisionally classified CMC under 15A(1). The Collector (Appeals) upheld this classification.
- The Tribunal rejected the appeal, affirming the classification under 15A(1) based on chemical test reports and technical literature.

Issue 5: Classification of CMC for M/s. Sridevi Chemicals
- The Assistant Collector classified CMC under 15A(1). The Collector upheld this classification.
- The Tribunal rejected the appeal, affirming the classification under 15A(1) based on chemical test reports and technical literature.

Issue 6: Classification of CMC for M/s. MCA Chemicals Ltd.
- The Assistant Collector classified CMC under 15A(1). The Collector (Appeals) upheld this classification.
- The Tribunal rejected the appeal, affirming the classification under 15A(1) based on chemical test reports and technical literature.

Preliminary Objections:
1. Maintainability of Revenue's Appeal: The Tribunal overruled the objection, citing the majority decision in India Automotives Ltd. v. Collector of Central Excise.
2. Grounds in Application under Section 35E(4): The Tribunal upheld the objection that the point of "cellulose ether" did not arise from the Assistant Collector's order.
3. Formulation of Points for Determination: The Tribunal overruled the objection, finding that the point was formulated in the order under Section 35E(2) and the application under Section 35E(4).

Merits:
- Technical and Scientific Meaning: Classification under Item 15A(1) should be based on technical and scientific meaning, not trade parlance.
- Chemical Test Reports: The Tribunal relied on the Departmental Chemist/Chief Chemist's reports, which classified CMC as a cellulose ether and chemical derivative of cellulose.
- Degree of Substitution: The Tribunal found no stipulation in Tariff Item 15A(1) regarding the degree of substitution for cellulose ether.

Conclusion:
- Appeal No. E/1450/86-C: Dismissed.
- Appeal No. E/1457/86-C: Allowed, restoring the Assistant Collector's order.
- Appeals No. E/1438/87-C, ED/SB/1632/83-C, ED/SB/1631/83-C, E/131/85-C: Rejected.

Additional Directive:
- Appellants may apply for benefits under Small Scale Industries notifications, to be examined by the Collector.