Holding

SCMC is a cellulose ether and is assessable under Central Excise Tariff Item 15A(1); the Assistant Collector’s reliance on the expert reports and the procedure followed under Rule 56 were proper.

Summary

Reliance Cellulose Products Ltd (RCPL) manufactures sodium carboxymethyl cellulose (SCMC) and initially classified it under Central Excise Tariff Item 68. The Department’s Chemical Examiner and Chief Chemist tested the product and reported it to be a cellulose ether, which falls under Tariff Item 15A(1). RCPL sought retesting, a fresh sample and challenged the classification, but the Assistant Collector refused a fresh test and classified the product under Item 15A(1), ordering payment of differential duty. RCPL appealed to the Collector and the Tribunal, both of which upheld the Assistant Collector’s order; the matter reached the Supreme Court. The Court held that the Assistant Collector correctly relied on the expert reports, there was no procedural infirmity under Rule 56, and that SCMC is a cellulose ether assessable under Item 15A(1). Consequently, the appeal was dismissed.

Issues considered

The Assistant Collector’s reliance on the Chemical Examiner’s and Chief Chemist’s reports was erroneous or not.
Whether there was a procedural infirmity under Rule 56 of the Central Excise Rules in refusing a fresh sample for retesting.
Whether sodium carboxymethyl cellulose (SCMC) should be classified under Tariff Item 68 or under Item 15A(1) as a cellulose ether.
How technical terms in a taxing statute should be interpreted – in their technical sense or in the common‑trade sense.

Legislation cited

Central Excise Ruless. Rule 56, s. Rule 9-8 (or 9-B)
Central Excise Tariff Act, 1985s. 15-A(1)

Subjects

central excisetariff classificationcellulose ethertechnical interpretationRule 56sample retestingstatutory interpretationexcise duty

Judgment

MIS RELIANCE CELLULOSE PRODUCTS LTD. • A
v.
COLLECTOR OF CENTRAL EXCISE, HYDERABAD

JULY 8, 1997

[SUHAS C. SEN AND K.T. THOMAS, JJ.] B

Excise:

Central Excise Tariff Act, 198~1tem 15-A (1) (as amended on
1.3.1982)-Cellulose ethers and ethers-Held, not intended to be excluded by C
the amendment.

Central Excise Rule, 194~Rule 56-Retesting of samples-Not being
satisfied with the report of Chemical Examiner, opportunity to have the
sample retested by Chief Chemist availed of by the Assessee-appellant but still
not satisfied with his report-Sending of fresh sample for a fresh test requested D
by the appellant-Request rejected by the Asstt. Collector--Held, in absence
of any procedural infimzity order of Asstt. Collector valid.

Central Excise Tariff Act, 1985-ftem 15-A(1}-Sodium Carboxymethyl
Cellulose (SCMC)-On chemical analysis found to be cellulose
ether-Product not shown to be known in the market by any other name and E
falling under any other entry other than Item 15-A(1)-Held, Tribunal was
right in holding that SCMC manufactured by the appellant answered the
description cellulose ether and as such assessable under Item 15-A(1).

Interpretation of Statutes:
F
Taxing statutes-Interpretation of Central Excise Tariff Item-Technical
meaning-Held, although nonnally common parlance meaning or the sense
in which commodity is known in the trade has to be attributed but if
legislature itself has adopted a technical tenn, it has to be understood in the
technical sense.
G
The appellant is manufacturer of sodium carboxymethyl cellulose
(SCMC). The appellant filed a classification list on 18.6.1982 and their
product SCMC was described as carboxymethyl cellulose and classified
under Tariff Item No. 68. The classification list was approved provisionally
and the assessments were made provisionally under Rule 9-8 of the H
485
·\
486 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A Central Excise Rules from 1.3.1982. A sample of the product was tested by
Departmental Chemical Examiner, who reported the test result as under:

"The sample is in the form of pale brown powder. It is a sodium salt
of carboxymethyl cellulose ...a cellulose ether."

B Appellant having not satisfied with the test report requested the
sample to be retested by the Chief Chemist. The request of the appellant
was acceded to and the sample was again tested by the Chief Chemist and
he also confirmed the test report of the Departmental Chemical Examiner.

C Again feeling aggrieved by the test report of the Chief Chemist, the
appellant requested for drawal of a fresh sample and sending it for fresh
test which was refused by the Assistant Collector. The appellant filed an
appeal against the order of the Assistant collector before the Collector
(Appeals), who by his order-in-appeal directed the Assistant Collector to
hear the case de nova.
D
Thereafter, the Assistant Collector issued a show cause notice calling
upon the appellant to show cause as to why sodium carboxymethyl cel-
lulose manufactured by them should not be classified under the erstwhile
Tariff Item 15-A(l) read with Chapter 39 of the Central Excise Tariff Act,
E 1985 and why the difference of duty payable under Tariff Item 15-A(l) and
that paid under Item 68 should not be paid under Section 11-A of the
Central Excises & Salt Act, 1944 from 28.2.1982 till the date of show cause
notice.

In reply to the show cause notice, the appellant stated that the show
F cause notice be not issued without first deciding the issue regarding drawal
of fresh sample and sending it to Chief Chemist on the ground that the
earlier sample was old. However, the Assistant Collector in its order
observed that the appellant did not show any evidence on record or
otherwise that the composition of sample gets affected due to age and . .,
G rejected the plea of the appellant.

The appellant preferred an appeal against the order of the Assistant
Collector before the Collector (Appeals) who upheld the order of the
Assistant Collector and held that the tests have been made repeatedly by ,
proper authority under Rule 56 of the Central Excise Rules. On further
H appeal, the Tribunal upheld the order passed by the Assistant Collector.
RELIANCE CELLULOSE PRODUCTS LTD. v. C.C.E.HYDERABAD 487

These orders were now challenged before the Supreme Court. This A
Court was referred to a number of test reports obtained by the appellant
from various persons and on the basis of these opinions, the reports of the
Departmental Chemical Examiner and the Chief Chemist were assailed.

Dismissing the appeal, this Court
B
HELD : 1. The Assistant Collector cannot be said to have erred in
relying upon the reports given by the Chemical Examiner and the Chief
Chemist. It may be that in a given case, the report of the Chief Chemist
may be demonstrated • to be palpably wrong. In such a case, the court may
direct re-examination of the whole issue. But that is not the case here. It C
has not been shown that the Chemical Examiner or the Chief Chemist was
in error in their analysis in any way. The views expressed by the Chemical
Examiner and Chief Chemist of the Government cannot be lightly brushed
aside on the basis of opinion of some private persons obtained by the
appellant. [495-A-B]
D
2. Under Rule 56 of the Central Excise Rules, the Central Excise
officer is empowered to take samples for the purpose of testing. He has to
communicate the result of such tests to the manufacturer. If the manufac-
turer is aggrieved by the result of the test, he can request the Assistant
Collector that the samples be retested. That procedure has been followed. E
Therefore, there is no procedural infirmity in the order of the Assistant
Collector nor has it been established that the Assistant Collector was
wrong in relying on the report of Chemical Examiner and Chief Chemist
in preference to the opinion obtained by RCPL from some private in-
dividuals. [495-C-D] F

3. Moreover, the 1:ribunal has referred to several technical dic-
tionaries and has concluded that the product sodium Carboxymethyl
cellulose is an ether. In the background of all these facts, it cannot be said
that the Tribunal has Wrongly concluded that the product manufactured
by the appellant falls under Tariff Item 15-A. There is ample evidence and G
technical literature to support the conclusion of the Tribunal and this
Court is not inclined to interfere with the finding made by the Tribunal at
this stage. [495-E-F]

4. It is well-settled that excisable commodities have to be understood H
488 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A in the sense in which the market understands them and have to be
classified accordingly. This proposition may generally be held to be right
but when a technical or scientific term has been used by the legislature, it
must be presumed that the legislature has used the term in their technical
sense. [495-F-G]
B 5. Regenerated cellulose, cellidose nitrate, cellulose accetate and
ethers as well as other chemicals which were derivatives of cellulose have
to be understood in the technical sense of the terms. Moreover, it has not
been shown that there is a special meaning given to the product of the
appellant in the market. If the word used in a fiscal statute is understood
c 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 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.
D In other words, if in the fiscal statute, the article in question falls within
the ambit of the technical term 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
E meaning in market parlance. [496-A·B; H; 497-A-B]

Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCC 241 and
Indian Cable Company Ltd. v. Collector of Central Excise, [1994] 6 SCC
610, relied on.

F 6. Cellulose ether has been made specifically taxable under entry
15A(l). The product manufactured by the appellant is sodium car·
boxymethyl cellulose which has been tested and found to be cellulose ether.
The Tribunal was right in holding that SCMC manufactured by the
appellant answered the description "Cellulose Ether" and as such was
G assessable under entry lSA(l). [497-F·G]

Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCC 241; Indian
Cable Company Ltd., Calcutta v. Collector of Central Excise, Calcutta and
Ors., [1994] 6 SCC 610 Chemical and Fibres of India v. Union of India &
H Ors., JT 1997 (1) S.C. 432, referred to.
RELIANCE CELLULOSE PRODUCTS LTD. v. C.C.E. HYDERABAD [SEN, J.) 489

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2886 of A
1991.

- From the Judgment and Order dated 1.1.91 of the Customs Excise
and Gold (Control) Appellate Tribunal, New Delhi in A. No. E/1438/88-C
in Order No. 1-6/91-C.
B
C. Mukhopadhyay and Sudarsh Menon, for the Appellant in C.A.
No. 2886/91.

Mukul Mudgal, for the Appellant in C.A. No. 784/92.

K.N. Bhat, Additional Solicitor General, Dilip Tandon, V.K. Verma C
and P. Parmeswaran, for the Respondents.

The Judgment of the Court was delivered by

SEN, J. M/s Reliance Cellulose Products Limited, the appellant-
company manufactures Sodium Carboxymethyl Cellulose (hereinafter D
referred to as SCMC). The contention of the appellant-company is that the
· product manufactured by them is classifiable under Item 68 of the Central
Excise Tariff Act. The contention of the Department is that the product
comes squarely within the tariff item 15A (1) and, therefore, there is no
reason to fall back upon the residuary head of tariff item No. 68. E
Tariff item 15A at the material time stood as under:

ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC
MATERIALS; AND OTHER MATERIALS AND ARTICLES
SPECIFIED BELOW- F
(1) Condensation, polycondensation and fifty percent
polyaddition products, whether or not modified or ad valorem
polymerised, and whether or not linear (for
example, pheno-plasts, amino-plasts, alkyds,
polyallyl esters and other unsaturated polyesters, G
silicones); polymerisation and co-polymerisation
i i',
products (for example, polyethylene,
polytetrahaloethylenes, polyisobutylene, polystyrene,
polyvinyl chloride, polyvinyl acetate, polyvinyl
chloro-acetate and
H
490 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A other polyvinyl derivatives, polyacrylic and
polymethacrylic derivatives, coumaroneindene
resins); regenerated cellulose; cellulose nitrate,
cellulose acetate and other cellulose esters, cellu1ose
ethers and other chemical derivatives of cellulose,
plasticised or not (for example, collodions,
B
celluloid); vulcanised fibre hardened gelatin natural
resins modified by fusion (run gums); artificial resins
obtained by esterification of natural resins or of
resinic acids (ester gums); chemical derivatives of
natural rubber (for example, chlorinated rubber,
c rubber hydrochloride, oxidised rubber, cyclised
rubber); other high polymers, artificial resins and
artificial plastic materials, including alginic acid, its
salts and esters; linoxyn.
(2) Articles of materials described in sub-Item (1), Fifty percent
D the following, namely :- ad valorem
Boards, sheeting, sheets and films, whether
lacquered metalised or laminated or not; flat tubings
not containing any textile material.
(3) Polyurethane foam. Seventy five
E percent
ad valorem
(4) Articles made of Seventy five
polyurethane percent
ad valorem.
F
Prior to 1.3.82 tariff item 15A stood as under:

"15A. ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC
MATERIALS AND CEI,LULOSE ESTERS AND ETHERS,
G AND ARTICLES THEREOF-

(1) The following artificial or syuthetic resins and plastic materials,
and cellulose esters and ethers in any form, whether solid, liquid '
or pasty, or as powder, granules or flakes, or in the form of
H moulding powders, namely :-
RELIANCECELLULOSEPRODUCTSLTD. v. C.C.E.HYDERABAD[SEN, J.] 491

xxxxxxxxx A
(2) x x x x x x x

(3) Polyurethane foam.

(4) Articles made of polyurethane foam." B
The argument of the appellant is that prior to 1.3.82, the main
heading of the Tariff Item 15A included "cellulose esters and ethers"
alongwith "artificial or synthetic resins and plastic materials." Sub-Item (1)
of Tariff Item 15A listed the various materials under three clauses (i), (ii)
and (iii) which were to be subjected to central excise duty. After the C
amendment made by the Finance Act, 1982, the opening sentence of
sub-item (1) of Tariff Item 15A, viz. "The following artificial or synthetic
resins and plastic materials ...... namely", clearly indicates that only those
materials which were mentioned in clauses (i), (ii) and (iii) were to be
taxed under Tariff Item 15A (1). Cellulose ether and esters do not figure
in any of these three clauses. It means that the clear intention of the D
legislature was to exclude cellulose esters and ethers from Tariff Item 15A
(1).

This argument is without any substance because under the amended
tariff item 15A under clause (i), various items which have to be taxed under E
item 15A have 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.

The appellant-Company filed a classification list on 18.6.82. Their
product Sodium Carboxymethyl Cellulose was described as Car- F
boxymethyl Cellulose and classified under Tariff Item 68. The Classifica-
tion list was approved provisionally and the assessments were made
provisionally under Rule 9-B of the Central Excise Rules from 1.3.82. A
sample of the product was tested by the Departmental Chemical Examiner,
who reported the test result as follows:
G
"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 H
492 SUPREME COURT REPORTS (19971 SUPP.1 S.C.R.

A 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 mat-
ter being 46.7 (forty six decimal seven). It is a cellulose ether which
B 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 the re-test was communicated to RCPL, they requested
for drawal of a fresh sample and sending it for a fresh test, on two grounds:

c (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
D in his Test Memo dated 8.4.83, viz .. the sample has to be
tested for:

(a) Regenerated Cellulose;

(b) Cellulose Nitrate, Cellulose acct ale and other Cclhilosc
E Ethers, Cellulose Ethers and other chemical derivatives of
cellulose, plasticised or not.

The Assistant Collector of Central Excise, vide his letter No.
V/68/17/49/84 dated 22.2.85 refused to draw a fresh sample for retest.
F Against the said order, RCPL filed an appeal before Collector (Appeals),
Madras, who by his order-in-appeal No. 191/85 (H) dated 2.5.86, allowed
the appe"al and directed the Assistant Collector to hear the case de novo.

Thereafter, the Assistant Collector of Central Excise, Hyderabad I
Division issued a show cause notice No. V/68/17/154/82 Vol. I dated 11.8.86
G calling upon RCPL to show cause as to why Sodium Carboxy Cellulose
manufactured by them should not be classified under the erstwhile Tariff
Item 15A(l) read with Chapter 39 of the Central Excise Tariff Act, 1985
and why the difference of duty payable under Tariff Item 15A(l) and that
paid under Item 68 should not be paid under Section 11 A of the Central
Excise and Salt Act from 28.2.82 till the dale of show cause notice. In this
H show cause notice the Assistant Collector, i1:icr alia staled that:-
RliLIANCECELLULOSEPRODUcrsr:ro. v. C.C.E.!IYDERABADISEN, .T.] 493

"It is no longer necessary to further analyse and ascertain whether A
the material is plasticisable and whether the product is affected by
acids in cold and above all whether the product is sodium car-
boxymcthyl cellulose at all as claimed by them when the test reports
clearly and in unequivocal terms indicated that product is composed
of sodium salt of sodium carboxymcthyl cellulose and the presence
of sodium docs not in any way affect the classification of the product B
as cellulose ether. It also appears that the age of sample is no criterion,
which affects the composition of the product and is not relevant."

In their reply dated 9.9.86 to the show cause notice, RCPL chal-
lenged the show cause notice stating that it could not be issued without C
first deciding the issue regarding drawal of fresh sample and sending it to
Chief Chemist. They also contended that the earlier lest reports of Chemi-
cal Examiner and Chief Chemist were not correct, and that CMC was not
ether and not classifiable under Tariff Item 15A (1). During the personal
hearing before the Assistant Collector on 11.9.86, their counsel renewed the
request for test of a fresh sample by Chief Chemist and requested for facility D
of cross-examination of Chemical Examiner and Chief Chemist on the next
date of hearing. Assistant Collector passed his order-in-original dated 14.10.86
classifying CMC under Tariff Item 15A (1) and directing RCPL to pay
differential duty from 28.2.82 to 27.2.86 without giving further hearing. In the
said order-in-original the Assistant Collector recorded the following reasons E
for not drawing a fresh sample for re-test by the Chief Chemist:

"The sample of their product was initially drawn on 8.4.83 and was
sent to the Chemical Examiner, Madras in the Prescribed test
memo. The test results were received in Chemical Examiner's
report dated 31.5.83 which revealed that the sample is a sodium F
salt of carboxymethyl cellulose and was a cellulose ether. On
receipt of this unfavourable test results from the chemical examiner
the company slated that they are not agreeable to this test report
and wanted that more elaborate tests as suggested by them should be
carried out to ascertain more detailed composition of the sample as G
the test report of the Chemical Examiner, Madras was incomplete.
The sample lying with the company only was sent for the purpose of
retest to the Chief Chemist, CRCL, New Delhi. The company also
gave a declaration that the sample which they requested for retest is
sodium carboxymethyl cellulose manufactured in their factory which
was furnished as an enclosure to their letter No. RCP/CE/6642/82-83 H
494 SUPREME COURT REPORTS (1997] SUPP. l S.C.R:"

A dated 13.9.83. In this respect, the company was specifically asked
.....
whether they would, like to send the duplicate sample for retest
and accordingly the sample was sent for re-test with the concur-
rence of the company. The report of analysis clearly confirmed the
original lest report asserting in unequivocal terms that the sample
is a cellulose derivative and that the presence of sodium docs not
B in any way affect the classification of the product as cdlulosc ether.
The company incidentally sought permission to send samples of
their product to National Test House, Aliporc. Permission was also
accorded for sending the samples. The company in their letter
RCP/CE/15A/6901 dated 22.9.83 also confirmed having sent

c samples to National Test House, Aliporc but never mentioned
about the test results to the department. Presumably the test results
were nol in their favour. Thus it may be seen that enough oppor-
tunities were given to the company for vindicating their stand in
the matter. Samples cannot be sent time and again at the will and
pleasure of the company. Acceptance of such a request of the
D company would defeat the purpose inasmuch as the samples intended
to be sent for lest may be so arranged to get favourable results also.
Moreover, there is a procedure set out under the rules for drawal of
samples for test and re-lest. Accordingly their contention that the
issue cannot be decided without a further test is not correct.

E The company also raised the issue that the test results given by the
Chief Chemist, CRCL, Delhi is not acceptable to them on the ground
that the sample is old. The company did not show any evidence on
record or otherwise that the composition of sample gets affected due
to age. Hence this plea of the company cannot be accepted.

F The appellant-company preferred an appeal against the order of the
Assistant Collector. The Collector of Central Excise (Appeals), Madras
upheld the order of the Assistant Collector and held that the tests have
been made repeatedly by proper authority under Ruic 56 of Central Excise
Rules. The Assistant Collector was right in not relying upon the other test
G results produced by the appellant-company.

On furtht:r appeal Tribunal upheld the order passed by the Assistant
Collector.

These ordas arc now under challenge before this Court. We were
H rdcrrt:d to a number of test reports obtained by the appellant from various
RELIANCE CELLULOSE PRODUCTS LTD. v. C.C.E. HYDERABAD [SEN, J.] 495

persons and on the basis of these opinions, the reports of the Departmental A
Chemical Examiner and also the Chief Chemist were assailed. We are of
the view that the Assistant Collector cannot be said to have erred in relying
upon the reports given by the Chemical Examiner and the Chief Chemist.
It may be that in a given case, the report of the Chief Chemist may be
demonstrated to be palpably wrong. In such a case, the Court may direct B
re-examination of the whole issue. But that is not the case here. It has not
been shown that the Chemical Examiner or the Chief Chemist were in error
in their analysis in any way. The views expressed by the Chief Examiner
and Chief Chemist of the Government cannot be lightly brushed aside on
the basis of opinion of some private persons obtained by the appellant.
c
Under Rule 56 of the Central Excise Rules, the Central Excise
Officer is empowered to take samples for the purpose of testing the
samples. He has to communicate the result of such tests to the manufac-
turer. If the manufacturer is aggrieved by the result of the test, he can
request the Assistant Collector that the samples be retested. That proce- D
dure has been followed. Therefore, there is no proce.dural infirmity in the
order of the Assistant Collector nor has it been established that the
Assistant Collector was wrong in relying on the report of Chemical Ex-
aminer and Chief Chemist in preference to the opinion obtained by RCPL
from some private individuals.
E
Moreover, the Tribunal has referred to several technical dictionaries
and has concluded that the product Sodium Carboxymethyl Cellulose is an
ether. In the background of all these facts, we are unable to uphold the
contention that the Tribunal has wrongly concluded that the product
manufactured by the appellant falls under Tariff Item 15A. There is ample p
evidence and technical literature to support the conclusion of the Tribunal
and we are not inclined to interfere with the finding made by the Tribunal
at this stage.

The next contention of the appellant was that the Tribunal has failed
to consider the way the products of the appellants were known in the trade. G
It is well-settled that excisable commodities have to be understood in the
sense in which the market understands them and have to be classified
accordingly. This proposition may generally be held to be right but when
a technical or scientific term has been used by the legislature, it must be
presumed that the legislature has used the term in their technical sense. H
496 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A The tariff entry 15A as it stood after its amendment made on 1.3.82 was:

"Regenerated cellulose, cellulose nitrate, cellulose accetate and
ethers and other chemicals derivatives of cellulose, plasticide or
not (for example Collodions, Celluloid)"

B Regenerated cellulose, cellulose nitrate, cellulose accetate and ethers
as well as other chemicals which were derivatives of cellulose have to be
understood in the technical sense of the terms. Moreover, it has not been
shown that there is a special meaning given to the product of the appellant
in the market.
c In the case of Dunlop India Ltd. v. Union of India and Others, [1976}
2 sec 241, it was laid down that in interpreting words in a taxing statute,
meaning must be given as people in trade and commerce, conversant with
the subject, generally treat and understand them. It was further observed
that technical and scientific tests offer guidance only within limits. Once
D the articles are in circulation and come to be described and known in
common parlance, the Court should find no difficulty for statutory clas-
sification under a particular entry. In that case, it was pointed out that
scope of an entry was a matter essentially for determination by the Depart-
ment. But when extraneous consideration enter the determination, inter-
E ference by the Court was called for. In that case, the dispute was about
classification of V.P. Latex. The question was whether V.P. Latex imported
by the tyre companies could be classified as rubber in raw state.

In the case of Indian Cable Company Ltd., Calcutta v. Collector of
Central Excise, Calcutta and Others, [1994} 6 SCC 610, it was held. that :
F
"In construing the relevant items or entry, in fiscal statutes, if it is
one of everyday use, the authority concerned must normally, con-
strue it, as to how it is understood in common parlance or in the
commercial world or trade circles. It must be given its popular
meaning. The meaning given in the dictionary must not prevail.
G Nor should the entry be understood in any technical or botanical
or scientific sense."

A word of caution was added in that judgment at page 615 of the
Report which is of significance. "In the case of technical words, it may call
H for a different approach".
RELIANCE CELLULOSE PRODUCTS LID. v. C.C.E. HYDERABAD [SEN, J.] 4CJ7

In other words, if the word used in a fiscal statute is understood in A
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 under-
stood 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. B
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 C
meaning in market parlance. For example, if a type of explosive (ROX) 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 Explosive.

In the case of Chemical and Fibres of India v. Union,of India & Ors., D
JT (1997) 1 S.C. 432, the question was whether polymer chips manufac-
tured by the assessee could be classified under Entry 15A as it stood prior
to 28.2.1964 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 E
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 Court.
F
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 15A(l). The product manufactured by the
appellant is Sodium Carboxymethyl Cellulose which has been tested and G
found to be Cellulose Ether. The question is whether this product will
come under entry 15A(l). 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" H
498 SUPREME COURT REPORTS [1997] SUPP. lS.C.R.

A and as such was assessable under Entry 15A(l).
Under these circumstances, we are of the view that there is no reason
to interfere with the decision reached by the Tribunal.

The appeal, therefore, fails .and is dismissed. There would be no
B order as to costs.
Civil Appeal No. 784 of 1992

In view of our above decision in C.A. No. 2886 of 1991, this appeal
is also dismissed with no order as to costs.
c R.K.S. Appeals dismissed.