Case: Reliance Cellulose Products Ltd Vs. Collector Of Central Excise, Hyderabad

M/s. Reliance Cellulose Products Limited, they manufactures sodium carboxymethyl cellulose (hereinafter referred to as SCMC). The contention of they is that the product manufactured by them is classifiable under Item 68 of the Central Excise Tariff Act, 1985. The contention of the Department is that the product comes squarely within Tariff Item) and, therefore, there is no reason to fall back upon the residuary head of Tariff Item 684. This argument is without any substance because under the amended Tariff Item15Aunder clause (i), various items which have to be taxed under Item15Ahave been enumerated and "other cellulose esters, cellulose ethers and other chemical derivatives of cellulose plasticised or not (for example, collodions, celluloid)" have been specifically included  5. They filed a classification list on. Their product sodium carboxymethyl cellulose was described as carboxymethyl cellulose and classified under Tariff Item 68. The classification list was approved provisionally and the assessments were made provisionally under RuleB of the Central Excise Rules from. A sample of the product was tested by the Departmental Chemical Examiner, who reported the test result as follows"The sample is in the form of a pale brown powder. It is a sodium salt of carboxymethyl cellulose ... a cellulose ether."6. RCPL were not satisfied with the test report. They requested for retest of the sample by the Chief Chemist, CRCL, New Delhi. The duplicate sample lying with RCPL was sent forretestby 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 46.7x 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 result of theretestwas communicated to RCPL, they requested for drawal of a fresh sample and sending it for a fresh test, on two grounds  (i)retestwas done after more than a year from the date of drawal of sample;(ii) because the Chief Chemists report did not mention anything about the issue raised by the Superintendent of Central Excise in his Test Memo dated, viz. the sample has to be tested for  (a) Regenerated cellulose;  (b) Cellulose nitrate, cellulose acetate and other cellulose esters, cellulose ethers and other chemical derivatives of cellulose, plasticised or not

Reasoning:
20. In other words, if the word used in a fiscal statute is understood in common parlance or in the commercial world in a particular sense, it must be taken that the Excise Act has used that word in the commonly understood sense. That sense cannot be taken away by attributing a technical meaning to the word. But if the legislature itself has adopted a technical term, then that technical term has to be understood in the technical sense. In other words, if in the fiscal statute, the article in question falls within the ambit of a technical term used under a particular entry, then that article cannot be taken away from that entry and placed under the residuary entry on the pretext that the article, even though it comes within the ambit of the technical term used in a particular entry, has acquired some other meaning in market parlance. For example, if a type of explosive (RDX) is known in the market as Kala Sabun by a section of the people who uses these explosives, the manufacturer or importer of these explosives cannot claim that the explosives must be classified as soap and not as explosive21. In the case of Chemical and Fibres of India Ltd. v. Union of India 1997 (1) JT 432] the question was whether polymer chips manufactured by the assessee could be classified under Entry15Aas it stood prior to4 under the heading "Plastics, All Sorts". The Court held that "plastics" was a commercial term and was known in the trade and was used in the trade. The court should not go into the technical analysis of composition and character of a product to decide the nature of the product in preference to the sense in which the market understood it. The court should go by the trade parlance. The Court pointed out that the conclusion drawn by the Court was also supported by the technical literature and dictionaries which were cited before the Court22. The case before us, is not a case where a commonly understood commercial article like "Plastics" is sought to be given a special meaning by reference to its chemical composition. Cellulose ether has been made specifically taxable under Entry. The product manufactured by the appellant is sodium carboxymethyl cellulose which has been tested and found to be cellulose ether.The question is whether this product will come under Entry22. The case before us, is not a case where a commonly understood commercial article like "Plastics" is sought to be given a special meaning by reference to its chemical composition. Cellulose ether has been made specifically taxable under Entry. The product manufactured by the appellant is sodium carboxymethyl cellulose which has been tested and found to be cellulose ether.The question is whether this product will come under Entry. It is not the case of the appellant that this product is known in the market by some other name and that name is to be found in some other entry. The Tribunal was right in holding that SCMC manufactured by the appellant answered the description "Cellulose Ether" and as such was assessable under Entry