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TMI Blog1993 (10) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise, declared that on 10-5-1986 he had purchased M/s. Maruthi Chemical Industries which was engaged in the manufacture of Celluloc Chemicals (waste cotton powder) falling under sub-heading 2904.00. In this letter Shri Thyagaraj also pointed out that during the period from 10-5-1986 to 31-3-1987 the total value of goods cleared from the factory was Rs. 34,18,714/- and he had not complied with the Central Excise formalities due to ignorance of the requirements under the Central Excise law. Thereafter, the Central Excise Officers visited the appellants factory and seized certain records. After further investigation a show cause notice dated 27-10-1987 was issued by the department requiring the appellants to show cause as to why (i) Cellu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal the appellants had raised the question of classification of their product and also the question whether the activity of conversion of cotton waste into powder at all amounts to manufacture within the meaning of Section 2(f) of the Act. He submitted that the appellants did not want to press the point that the activity undertaken by them does not constitute 'manufacture'. Making his submissions on question of classification of their product the learned Counsel stated that the appellants are engaged in the manufacture of Cotton waste powder known as "Celluloc Chemical". He added that for the manufacture of cotton waste powder, cotton waste and Hosiery waste are first subjected to Sulphonation under alcoholic condition and thereafter the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 3912.90 has to be synthetic or plastic in origin is not correct. He stated that according to the Condensed Chemical Dictionary, 10th Edition, revised by G. Hawley Cellulose is a product of natural origin. He added that it is also not correct that Chapter 39 covers only plastics or synthetic products. He referred to the test reports of various private laboratories filed by the appellants and stated that even according to those reports the product in question was 'Cellulose'. He contended that the appellants' product being 'Cellulose' it was correctly held as classifiable under Heading 3912.90 in preference to Heading No. 3800.10. He stated prior to the declaration made in their letter dated 5-5-1987 the appellants had been clearing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or included in primary forms. In order to find out the chemical nature and origin of "Cellulose" we refer to the following notes to Heading 39.12 to the H.S.N. which is an internationally recognised test : "(A) CELLULOSE Cellulose is a carbohydrate of high molecular weight forming the solid structure of vegetable matter. It is contained in cotton in almost a pure state. Cellulose not elsewhere specified or included, in primary forms, falls in this heading. Regenerated cellulose is a glossy, transparent material usually obtained by precipitation and coagulation when an alkaline solution of cellulose xanthate is extruded into an acid bath. It is usually in the form of thin, transparent sheets which are classified in Heading 39.20 or 39. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oratories after testing the samples of product supplied by the appellants, had confirmed that the product is nothing but cotton waste powder, having no plastic content in any form. 6. On perusal of one of the reports at page 47 of the paper book issued by Sri Ram Institute for Industrial Research we find that on test the sample described as "Cotton Waste powder (Cellulose Chemical)" was found to be "Cotton Waste". According to the report issued by Italab (Pvt.) Ltd., Bombay at page 48 of the paper book, the product was found to be a "White Fibrous powder free from any visual extraneous plastic materials". Another report at page 50 of the paper book issued by the Central Institute of Plastics Engineering states that the material was id ..... X X X X Extracts X X X X X X X X Extracts X X X X
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