9911796707
TMI Blog1991 (1) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... abad 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 2 O 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 CH 2 OONa + 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 purpose of standardisation of the grade for sales, blending of the material with sodium sulfate was carried out to bring it to 50-54% active matter. (ii) CPIL filed classification list No. 2/81-82, dated 24-3-1982 claiming classification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(1). He classified this end product under Item 68 of the Tariff and finally approved the classification list No. 2/81-82 accordingly. He also directed CPIL to file classification list for alkali cellulose under Item 15A( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (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 technical literature on the subject. The Collector (Appeals) further observed that in the application under Section 35E(4) the Assistant Collector relied upon the selected portions of technical books mentioned in the said application, but in support of such reliance no independent evidence had been laid to show that the CMC manufactured by CPIL was of a particular class and cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir 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) CMC was classified under ITC 29.01/45 as organic compound. (b) CMC was water soluble as affirmed by ISI (IS 3520-1966) and all other products falling under Tariff Item 15A were not water soluble. (c) Chemical examiner, Baroda reported that the sample was in the form of white fluffy powder and it was a mixture of sodium carboxymethyl cellulose and inorganic matter. (d) CMC was not similar t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult 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 carboxymethyl cellulose. Percentage of Active matter being 46.7 (forty six decimal seven). It is a cellulose ether which is one variety of cellulose derivatives. The presence of sodium in the product does not affect its classification as cellulose ether. When this re-test result was communicated to RCPL, they requested for drawal of a fresh sample and sending it for test, on two grounds : (i) re-test was done after more than a year from the date of drawal of sample; (ii) because the Chief Chemist s report did not mention anything about the issue raised by the Superintendent of Central Excise in his Test Memo dated 8-4-1983, viz. the sample has to be tested for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 28-2-1982 to 27-2-1986 without giving further hearing. In the said order-in-original the Assistant Collector recorded the following reasons for not drawing a fresh sample for re-test by the Chief Chemist : The main issue contended by the company is that the show cause notice could not be issued to them without deciding the issue regarding the drawal of a further fresh sample. As narrated above, the sample of their product was initially drawn on 8-4-1983 and was sent to the Chemical Examiner, Madras in the prescribed test memo. The test results were received in Chemical Examiner s report dated 31-5-1983 which revealed that the sample is a sodium salt of carboxymethyl cellulose and was a cellulose ether. On receipt of this infavourable test results from the chemical exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 Excise Rules read with Notification No. M.F.(DR) 61/63-CE, dated 20-4-1963. The Assistant Collector could not rely upon other test results submitted by the appellants. He also held that as the assessments were made provisionally under Rule 9-B of the Central Excise Rules, demand for differential duty could be raised under that Rule after final assessment and the Rule 11-A was not attracted. The present appeal before this Tribunal challenges the impugned order of the Collector (Appeals). (IV) Appeal No. ED/SB/l632/83-C (M/s. Kalpana Chemicals Pvt. Ltd. v. Collector of Central Excise, Hyderabad). The appellants of this appeal manufactured sodium carboxymethyl cellulose (in short CMC) and certain other products. Prior to 28-2-1982, all these products were classified under Item 68 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural 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 chemical derivatives of natural rubber and linoxyn, etc...... In view of this, it has to be held that the Tariff Item 15A(1) also includes materials and articles, which do not strictly come under the generic term plastics . Collector (Appeals) also observed that the Tariff Item does not cover only those chemical derivatives of cellulose which have the characteristics of plastics. The expression plasticised or not has to be read literally and the examples of chemical derivatives of cellulose which are plasticised and which are not plasticised. For example, celluloid mentioned in the Tariff is a thermoplastic made from nitrocellulose, camphor and ethanol. Hence, it is a chemical derivative of cellulose which is plasticised. On the other hand, collodion refers to cellulose tetranitrate, soluble in a mixture of ethanol and ethoxyethane and this solution is used for coating materials and, in medicines, for sealing wounds and dressings. This is an exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rintendent 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 order-in-original No. 17/83, dated 8-4-1983, the Collector held that the Tariff entry 15A(1) as it stood from 1-3-1982 contains artificial or synthetic resins and plastic materials, and other materials and articles specified therein. So this entry covers not only artificial and synthetic materials but also, other materials and articles specified therein. Cellulose ethers and other chemical derivatives of cellulose, plasticised or not is included in that entry. Sodium carboxymethyl cellulose manufactured by Sridevi Chemicals fall under this description i.e. chemical derivatives of cellulose whether plasticised or not . That the product in question is a cellulose derivative is not contested and irrespective of whether it is plasticised or not plasticised it would fall under that description . He, therefore, classified the product CMC under Tariff Item 15A(1). He also held that by not filing the declaration under Notification No. 111/78-C.E, dated 9-5-1978 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e derivative. The percentage of active matter (sodium car-boxymethyl cellulose) content of the sample is 47.7 by weight. Sodium carboxymethyl cellulose is known to have a variable purity ranging from the crude one with a high percentage of sodium chloride to a product as saying 99.5% purity. The purity is not material to its classification as a cellulose derivative. A copy of the test report was made available to MCA. They contended that they manufactured alkali cellulose by reacting wood pulp with caustic soda lye. They said alkali cellulose attracted classification under Tariff Item 15A(1) as other chemical derivative of cellulose. This intermediate product was subjected to further chemical reaction with monochloro acetic acid or sodium Monochloro acetate, which resulted in the final product CMC, sodium chloride and Glycolic compounds etc. They pleaded that their CMC was not a direct derivative of cellulose, but it was a derivative of alkali cellulose which was a chemical derivative of cellulose and hence CMC was not classifiable under Tariff Item 15A(1). Their contention was not accepted by the Assistant Collector and he classified the CMC under Tariff Item 15A(1). His deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 397 1961 ITR 123 1982 (134) ITR 601 (M.P.) at page 605 (iii) This point was decided in the majority judgment reported in 1986 (26) E.L.T. 99 (Tribunal) - India Automobile Ltd. v. Collector of Central Excise. It was held by the majority decision of the Tribunal in that case that appeal to the Appellate Tribunal lies against the order of Collector (Appeals) passed on an application filed under sub-section (4) of Section 35E in pursuance of Collector s order under sub-section (2) of Section 35E of Central Excises and Salt Act, 1944. (iv) After availing of the proceedings, one cannot take the plea later that the proceedings are not valid. 1986 STC 485 (para 7) was relied on. Preliminary Objection No. 2 3.2 (a) In the show cause notice as well as before the Assistant Collector the Department s case was that CMC is chemical derivative of cellulose. Before the Collector (Appeals), the Department took the ground that it was cellulose ether. The question raised in the application under Section 35E(4), i.e. whether the CMC is cellulose ether, did not arise out of the Assistant Collector s order. The point that CMC was a cellulose ether was not raised in the show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1968. While disposing of the reference application, the Tribunal held that the questions of law which were required to be referred to the High Court in terms of Section 82B should arise out of the Tribunal s order and those should be questions of law. The question regarding the evidentiary value of the Panchnama in the recovery of gold, because the Panchnama did not support it, was never contended by the applicant at the time of hearing of the appeal before the Tribunal. Tribunal held that it was not a point which was included in the Tribunal s order and, hence, it could not be referred to the High Court. (v) 1988 (33) E.L.T. 403 (Tribunal) This decision also relates to reference application. Referring to question No. 4 of the reference application, the Tribunal, vide paragraph 16 of the decision, observed that the grievance of the applicant was not against the order of the Tribunal, but against the other authorities probably the adjudicating authority and the Board, and, therefore, it could not be said that this question arose from the order of the Tribunal. (vi) 1987 (31) E.L.T. 352 (Delhi). This judgment also relates to a reference application under Section 130 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight from the stage of show cause notice upto the present stage of appeal in the Tribunal. It is true that in the show cause notice and before lower authorities the Department contended that CMC is a chemical derivative of cellulose, and in the present appeal Department has stated that it is cellulose ether. This does not affect the Department s case. Omission or commission of facts does not affect the classification. He relied on 1990 (45) E.L.T. 263 (Tribunal) and read paras 10, 11, 41, 42 and 43 of the said order . The basis of classification is Chief Chemist s opinion, which has not been challenged by CPIL. They were manufacturing alkali cellulose as the intermediate product which was the first stage derivative of cellulose. CMC was the second stage derivative of cellulose. Both were classifiable under Item 15A(1). As against the Tribunal s decision in Sarabhai Chemical Ltd., learned JDR relied on Tribunal s decision in Northern Plastics case. Shri Anil Dhiwan, the learned Advocate emphasised on the last but one sentence of para 43 of the Tribunal s decision in Northern Plastics case to distinguish that decision from the facts of the present case. He read from paras 3 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention that CMC is cellulose ether and chemical derivative of cellulose : (i) Page 578 of the B.T.N. Chapter 39.03. Section VII. Under the Heading (B) Chemical derivatives of cellulose, it says that the principal chemical derivatives of cellulose, whether or not plasticised are : xxx xxx xxx (4) Cellulose ethers................ Other cellulose ethers of commercial importance include methyl cellulose, hydroxyethyl cellulose and carboxymethyl cellulose. These are water soluble and are used as thickeners and as glues . (ii) HSN also says the same thing. (iii) The condensed Chemical Dictionary, 10th Edition by Gessner G. Hawley, Page 199. It describes CMC as a semi synthetic water soluble polymer........ . (iv) Polymers and Resins - their Chemistry and Chemical Engineering by Brace Golding. At page 209 of this book, in the third paragraph, carboxymethyl cellulose has been mentioned under heading cellulose ethers. At page 214 of the same book, carboxymethyl cellulose has been described as an ether of cellulose and hydroxyacetic (Glycolic) acid. At the same page, the following is also stated : - Theoretically, complete re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te) is an anionic cellulose ether manufactured by the reaction of monochloroacetic acid, as either the acid or the sodium salt, and alkali cellulose. (viii) Encyclopaedia of Polymer Science and Technology, Volume 3 . At page 520 of this book, it is stated sodium carboxymethyl cellulose is the most widely used water-soluble cellulose derivative. At page 459 of the book, sodium carboxymethyl cellulose appears under Cellulose ethers. Shri Sunder Rajan. argued that according to the above technical books, CMC is a cellulose ether, a chemical derivative of cellulose. He also argued that degree of substitution is not relevant for classification under Tariff Item 15A(1). As cellulose ether and cellulose derivative are specifically covered by Tariff Item 15A(1), nothing further is to be seen. On this point he relied on the following decisions: (i) 1986 (26) E L.T. 1042 (Tribunal) - Sun Export Corporation, Bombay Others v. Collector of Customs. (ii) 1986 (23) E.L.T. 179 (Tribunal) - Advani Oerlikon Ltd., Bombay v. Collector of Customs, Bombay. (iii) 1988 (34) E.L.T. 643 (Tribunal) - Collector of Customs, Bombay v. Hico Products Ltd., Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments of Shri Anil Dhiwan, Advocate in Appeal No. E/1450/86-C are as follows: 5.1 CMC is not ether. Ether is a compound. Compound must be homogeneous and has fixed characteristics. Say, Water = H2O. (i) In the Penguin Dictionary of Science by E.B. Uvarow and Alan Isaacs, Sixth Edition, Page 82, compound has been defined as A substance consisting of two or more elements chemically united in definite proportions by weight., The formation of a compound involves a chemical reaction and the elements cannot be separated by purely physical means . (ii) In the Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, Second Edition, Page 67, compound has been described as A chemical combination of two or more elements; called constituents. Compounds are represented by formulas which specifically indicate their atomic or ionic content and the proportion by weight of their elements. ....... Its properties are almost invariably different from those of individual constituents. A significant feature of compounds is their homogeneity, that is, the fact that any given quantity of a compound has the same properties throughout ...... . (iii) In the Condensed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Technically and chemically CMC is not an ether. It is not a derivative of cellulose. It is a derivative of alkali cellulose, an intermediate product. Experts have stated that CMC is a modified cellulose. The affidavit of Dr. S.P. Potnis has been specifically cited. CMC is not plasticised. It is soluble in water. CMC is some times loosely termed as cellulose ether. At page 105 of Encyclopaedia of Plastics, Polymer, and Resin, Vol. I, compiled by Michael and Irene Ash , CMC has been described as cellulose gum . 5.3. CMC was not classifiable under Tariff Item 15A(1). Trade Notice of Hyderabad Central Excise Collectorate, vide C. No. V/68/8/1/85 M.P., dated 14-5-1985 which circulated Director General of Inspection, Customs, Central Excise letter F. No. 2687/2/81, dated January, 1985, classified CMC under Tariff Item 68. That is the correct classification. BTN is not the basis of Tariff classification as held by Supreme Court in this case of Atul Glass Ltd., reported in 1987 (25) E.L.T. 473 (S.C.). Department has not discharged the burden of classification. In support of his argument that CMC was correctly classifiable under Tariff Item 68, Shri Dhiwan cited the following past ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 (33) E.L.T. 699 (Tribunal) Para 10 (d) 1988 (34) E.L.T. 393 (Tribunal) Para 7 (e) 1985 (22) E.L.T. 216 (Tribunal) Para 26 (f) 1988 (37) E.L.T. 152 (Tribunal) (g) 1989 (44) E.L.T. 147 (Tribunal) Para 6 (ii) All CMCs are not ether. Only those CMCs, where etherification is complete or has at least advanced substantially, can be classified as ether. (a) 1985 (21) E.L.T. 410 (Delhi) (b) 1982 (10) E.L.T. 790 (GOI) (c) 1980 (6) E.L.T. 728 (GOI) (d) 1988 (34) E.L.T. 643 (Tribunal) Paras 4 6 (e) 1984 (18) E.L.T. 521 (Tribunal) Paras 9 and 10 (iii) T.I. 15A(1) covers only products mentioned therein. Mixtures of such products with any other article or material would take the mixture outside T.I. 15A(1). The product of the appellant, viz. SCMC, is a mixture of CMC and glycolic compounds and salt. So, it would not fall under Tariff Item 15A. (a) 1981 (8) E.L.T. 108 (Delhi) Para 14 (b) 1989 (40) E.L.T. 424 (Tribunal) Paras 4 5 (c) 1987 (32) E.L.T. 616 (Tribunal) (d) 1985 (22) E.L.T. 3 (S.C.) (e) 1989 (40) E.L.T. 129 (Tribunal) (iv) CMC a not being a plastic or resin does not fall under T.I. 15A. (a) 1989 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted a written note on the points of his arguments. The gist of his arguments is as follows : 6.1 Appeal No. E/1438/87-C (M/s. Reliance Cellulose Products Ltd.) (i) Cellulose ether was specifically mentioned in Tariff Item 15A(1) prior to 1-3-1982, when the appellants product was classified under Tariff Item 68. So, it could not be said that the same product became cellulose ether with effect from 1-3-1982 and could be classified under Tariff Item 15A(1). (ii) Chemical examiner s test report of the appellants product said that it was a sodium salt of carboxymethyl cellulose. Carboxymethyl cellulose is a cellulose ether . Sodium is required to be removed from the appellants product 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 form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 23-5-1982 by the Assistant Collector, Hyderabad III Division classifying SCMC under Tariff Item 68. He had no jurisdiction to review his own approval of classification list. Thus, the original order in that case is liable to be set aside. 7. The learned Advocate Shri Joggaya Sharma filed a written note giving his further submissions on behalf of M/s. Sridevi Chemicals and M/s. Kalpana Chemicals (P) Ltd., in which it was stated, inter-alia, that their sodium carboxymethyl cellulose was a mixture of several products and not a single compound. It was formed by elements chemically united in indefinite proportions, as the completion of reaction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose CMCs where etherification was complete or at least advanced substantially could be classified as ether. ISI specification IS-5306 of 1978, para 0.3 gives specification for sodium carboxymethyl cellulose, food grade. Irrespective of degree of substitution, CMC is ether. Chief Chemist reported that it was a cellulose derivative. (iii) Proposition (III) that SCMC was a mixture of CMC and glycolic compounds and salt and such mixture was outside the purview of Tariff Item 15A(1), had no basis. Tariff Item 15A(1) mentioned other materials . Other materials 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entific meaning should be given in classifying the goods under Tariff Item 15A. In the present case, the disputed products were soluble in water, whereas ether was not soluble in water. In the case of difference of opinion between the experts, the benefit should go to the assessee. The experts were not produced by the Department for cross examinations. 12. Shri Sunder Rajan disputed the contention raised in the written note filed by the learned Advocate in Appeal No. E/131/85-C that their product 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Sarabhai Chemicals is not relevant to the facts of this matter. The ld. Departmental Representative cited the Tribunal s decision in Northern Plastics case. But the ld. Advocate has rightly contended that in the said case no show cause notice was issued and in the last but one sentence of para-43 of the said decision, the Tribunal observed that the phrase point arising out of the decision refers to the commissions and omissions so far as they are relevant and relate to facts 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 Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riston. In the extract filed by him, of page 444 of this book, sodium carboxymethyl cellulose is mentioned as an ether. It is also mentioned that the degree of substitution achieved commercially is usually about 0.7 and at this type of sodium carboxymethyl is water soluble. 14.3 CMC is also discussed in another publication cited by Shri Sunder Rajan (Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, Pages 51-52) This publication refers to 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing for M/s. Reliance Cellulose Products Ltd., Shri Joggaya Sharma stated that prior to 1-3-1982 CMC was classified under Tariff Item 68 and not Tariff Item 15A(1). Cellulose ether was specifically mentioned in Tariff Item 15A(1) prior to 1-3-1982 and also after 1-3-1982 . Therefore, it could not be said that the same product became cellulose 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R MATERIALS; AND ARTICLES SPECIFIED BELOW : Fifty percent Ad valorem Condensation, polycondensation (1) and poly-addition products, whether or not ad valorem modified or polymerised, and whether or not linear (for example, pheno-plasts, amino-plasts, alkyds, polyallyl esters and other unsaturated polyesters, silicones); 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82. In this amended Tariff, effective from 1-3-1982, cellulose ethers and other chemical derivatives of cellulose , whether 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported that it was a variety of cellulose derivative. The test report of the Chief Chemist was not challenged by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... li cellulose by reaction with sodiun salt of chloroacetic acid in sigmablade mixture. According to Material 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 existe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the tariff entry and any other entry in Tariff Schedule. (Para 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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