Exciseability and classification of Cotton Linters after processing - Whether classifiable under Heading 1401 or 4701 - Central Excise - 30/90-CX.4

Exciseability and classification of Cotton Linters after processing - Whether classifiable under Heading 1401 or 4701 Circular No. 30/90-CX.4 Dated 7-8-1990 [From F.No. 61/24/89-CX.4] Government of India Central Board of Excise Customs New Delhi Subject : Exciseability and classification of Cotton Linters after processing - Whether classifiable under Heading 1401 or 4701. I am directed to refer the Representations have been received in the Board regarding the correct classification of Cotton Linters after being subjected to certain processes as either bleached Cotton Linters of Heading 1401 or as Cotton Linter Pulp of Heading 4701 and about divergence in classification of the products of various units in different Collectorates. It has been represented that duty is being demanded on these products as bleached Cotton Linters under Heading 1401 and the claim of the party for classification as Cotton Linter Pulp under Heading 4701 is being rejected. 2. Attention is invited to HSN Explanatory Notes at pp.99 and 655 which indicate that Cotton Linters in raw, cleaned, bleached, dyed or rendered absorbant condition are classifiable under Heading 1401 irrespective of their intended use. However if the process adopted is properly regarded as a process of pulping, the resultant product is "Cotton linters are short cotton fibres that adhere to the seed after ginning. They are an important source of cellulose. Cellulose in its natural fibrous form is used in paper type product and as a chemical raw material for the manufacture of cellulose derivatives and regenerated cellulose products. Cellulose can be isolated from cotton linters by pulping process and is referred to as Chemical Cotton. The usual procedure for preparing chemical cotton from raw linters contain in first removing admixed impurities by mechanical cleaning, then digesting or cooking the linters in milk alkaline liquors, followed by bleaching, washing and drying operations. Chemical cotton linter pulp is sold in sheet form, for the paper and paper board and viscose trade in loose form for making cellulose derivatives. It is reported in the books that pulping of the cotton linters is achieved only by cooking or digestion. This is done in either vertical, stationary or spherical rotary type of digesters using a dilute solution of sodium hydroxide (1.5% to 3.0%) to give about 8% Sodium Hydroxide on the weight of dry linters. Cooking is done at the pressure of 30 to 100 psi for 3 to 8 hours. The object of digestion is to accomplish the maximum solution of non-cellulosic and ligneous materials in the raw linters while leaving the product at the desired level of viscosity. The residual cotton contains about 99% alpha cellulose. This digestion is accompanied by some degradation so that the resultant material usually has a molecular weight lower than that of native cellulose. It may be reasonably concluded from the above description that the product obtained from cotton linters on digestion under pressure as described above, will only be classifiable as cotton linters pulp, under heading 47.01 of the CET. It is seen from the above that the products envisaged under Item No. 14.01 of the CET are those cotton linters which are raw, cleaned, bleached or rendered absorbent. Those cotton linters when subjected to the process of digestion as detailed above stand excluded from that item and would be classifiable under Item No. 47.01 of CET. It would thus be seen that the classification of a product under 14.01 as cotton linters, or under 47.01 as cotton linter pulp or under 39.12 as cellulose would entirely depend on the method of manufacture." 3. It is also pointed out that where by adoption of the processes on Cotton Linters results in a product remaining to be classified under heading 1401 as bleached Cotton Linters, the process cannot be regarded as a process of manufacture in the absence of a fundamental transformation of the raw material. Accordingly, further duty on bleached cotton linters made from cotton linters would not be attracted. 4. In view of the above, the Board directs that the pending assessments may be finalised in the light of the clarification given above. 5. Field formations and trade interest may also be suitably advised.