1997 (7) TMI 652 - SC - Central Excise

Summary

Issues Involved:
1. Classification of Sodium Carboxymethyl Cellulose (SCMC) under the Central Excise Tariff Act.
2. Validity of test reports and procedural compliance.
3. Interpretation of technical terms in fiscal statutes.

Summary:

1. Classification of SCMC:
The appellant-company, M/s. Reliance Cellulose Products Limited, contended that SCMC should be classified under Item 68 of the Central Excise Tariff Act. The Department argued that SCMC falls under Tariff Item 15A(1). The Supreme Court upheld the Department's classification, noting that "cellulose ethers and other chemical derivatives of cellulose" are specifically included in Tariff Item 15A(1).

2. Validity of Test Reports and Procedural Compliance:
The appellant challenged the test reports from the Departmental Chemical Examiner and the Chief Chemist, arguing for a fresh sample test. The Assistant Collector and subsequent authorities, including the Tribunal, relied on the initial and re-test reports, which classified SCMC as a cellulose ether. The Supreme Court found no procedural infirmity, stating that the Assistant Collector followed Rule 56 of the Central Excise Rules, which allows for sample testing and re-testing. The Court emphasized that the opinions of the Chemical Examiner and Chief Chemist cannot be lightly dismissed based on private test reports.

3. Interpretation of Technical Terms in Fiscal Statutes:
The appellant argued that SCMC should be classified based on its common trade understanding. The Supreme Court held that when the legislature uses technical terms, they must be interpreted in their technical sense. The Court referenced previous judgments, including Dunlop India Ltd. v. Union of India and Indian Cable Company Ltd. v. Collector of Central Excise, to support the principle that technical terms in fiscal statutes should be understood technically. The Court concluded that SCMC, being a cellulose ether, falls under Tariff Item 15A(1) and not under the residuary Item 68.

Conclusion:
The Supreme Court dismissed the appeal, affirming the Tribunal's decision that SCMC is classifiable under Tariff Item 15A(1). The Court found no reason to interfere with the Tribunal's findings and upheld the classification based on technical literature and test reports. The appeal was dismissed with no order as to costs.