1984(01)LCX0005

IN THE CEGAT, SPECIAL BENCH ‘C’, NEW DELHI

S/Shri G. Sankaran, Member (T), H.R. Syiem, Member (T)  and S.C. Jain, Member (J)

HOECHST DYES & CHEMICALS LTD.

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Order Nos. C/57-60/84-C, dated 27-1-1984 in Appeal Nos. CD(SB)/524, 1228/81-C, 873 & 875/83-C

Chemicals & Fibres India Ltd. v. U.O.I. — 1982(06)LCX0018 Eq 1982 (010) ELT 0917 (Bom.)  — Relied on [Paras 7, 8, 11]

Dunlop India Ltd. v. U.O.I. — 1975(10)LCX0016 Eq 1983 (013) ELT 1566 (S.C.) — Referred............................. [Para 7]

Elpro International — Appeal No. 599/80-C — Referred..................................................... [Para 7]

Kanwar Sewing Machine Co. v. Collector — 1983(02)LCX0049 Eq 1983 (012) ELT 0804 (Tribunal) — Referred... [Para 6]

Tamil Nadu Electricity Board v. Collector — 1982(12)LCX0003 Eq 1983 (012) ELT 0174 (Tribunal) — Referred. [Para 6]

REPRESENTED BY :        S/Shri Shanti Bhushan, Sr. Advocate with R.J. Majra, Advocate, for the Appellant.

Shri A.S. Sundar Rajan, JDR, for the Respondent.

[Order per : G. Sankaran, Member (T)]. - The captioned appeals have come to this Tribunal as transferred proceedings under Section 131B of the Customs Act 1962, and are being disposed of as if they were appeals filed before the Tribunal.

2. The issue involved being similar, all the appeals are disposed of by this common order.

3. The issue involved is whether the product known by the brand name “MOWIOL S 50B”, which is stated to be a special kind of poly vinyl alcohol, imported by the appellants were correctly classifiable under Chapter 39 (Heading 39.01/06) or under Chapter 29 (Heading 29.01/45) of the First Schedule to Customs Tariff Act, 1975. The Customs authorities classified the product under Chapter 39 and not under Chapter 29 as claimed by the appellant’s (referred to hereinafter for bravity’s sake as ‘HOECHST’).

4. The refund claim filed by ‘HOECHST’ claiming re-assessment of the product under Chapter 29 was rejected by the Assistant Collector of Customs, Bombay and the appeal against the Assistant Collector’s order was rejected by the Appellate Collector of Customs, Bombay, by a detailed order. It is this order of the Appellate Collector that is now under challenge before us.

5. We have heard with considerable interest the arguments addressed by the learned Counsel for ‘HOECHST’ and the learned Representative of the Respondent. We have also perused the record of the case.

6. The submissions for ‘HOECHST’ before us may be summarised  thus :-

(a)        The product “MOWIOL S 50B” (the record uses the names : “MOWIOL” and “MOVIOL” interchangeably) is not the same thing as normally Poly vinyl alcohol (PVA) in that ‘Sulpho’ groups are added to the PVA chain by the process of Sulphonation resulting in “MOWIOL”.

(b)        The Customs authorities are taking the product under the group ‘condensation, polycondensation, polyaddition, polymerisation and co-polymerisation products’ occurring in Heading No. 39.01/06 of the Customs Tariff Schedule. A reference to statutory Note 2 to Chapter 39 would show that the above expressions are to be taken to apply only to goods of a kind produced by chemical synthesis, answering to one of the descriptions specified in the note. The specified description which is relevant here is ‘artificial plastics including artificial resins’.

(c)        The questions which, therefore, arise for answer before the subject product can be put in the category of polymerisation products would be -

(i)       Is it a product of polymerisation?

(ii)     Is it goods produced by chemical synthesis?

(iii)    Does it answer to the description : ‘artificial plastics including artificial resins’?

(d)       Taking question (iii) above first, reference was made to the report of Dr. Starck, the inventor of the product. According to this report, the product does not have plastic character; it is not mouldable. Whereas normal PVA may have plasticity, “MOWIOL S 50B” does not have. Reference was also made to the test reports furnished by ITALAB Pvt. Ltd., Bombay which also show that the subject product is not mouldable. Reference was also made to the general notes forming part of the explanatory notes to the Customs Co-operation Council Nomenclature (CCCN). The said notes on page 568 Vol. 2 state that artificial resins and plastics materials have the common characteristic of plasticity i.e. of being capable, or of having been capable at some stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plastisizers) into shapes which are retained on the removal of the external influences. The shaping processes used include moulding, casting, extruding, rolling, etc. Viewed from this angle, the subject product does not answer to the description of ‘artificial plastics including artificial resins’. Reliance was placed on the Tribunal’s decision in the case of Kanwar Sewing Machine Co. reported in 1983(02)LCX0049 Eq 1983 (012) ELT 0804 (T) = 1983 E.C.R. 264-D (CEGAT) where it was held that ‘the explanatory notes in the CCCN are of considerable persuasive value in the matter of interpreting expressions occurring in the Customs Tariff Schedule as well as ascertaining the scope of headings therein. Reliance was placed also on the Tribunal’s decision in the case of Tamil Nadu Electricity Board reported in 1983 (012) ELT 174 in which it was held that resins classified under Chapter 39 have, among other things, characteristics of plasticity.

(e)        The Sulpho group which is introduced in the PVA molecule is present only in a few positions and not all along the chain as should be the case in a polymer. This would be evident by reading of the patent (a copy of which has been filed) which states that PVA shows the effect described in the patent even if, for instance, only one atom of sulphur is present for 500 ‘CH₂ - CH - OH - groups.

(f)         The classification of the subject product had come up for consideration by way of a revision application before the Central Government and, by an order dated 7-5-1971, the Government had come to the conclusion that “MOWIOL S 50B” was not a plastic article and, therefore, fell outside the scope of Customs Tariff items Nos. 82(6)(A)(i) and 82(6)(A)(iii) as the tariff stood at the relevant time. It is also stated in the said order that, on test of a sample of the product, the Central Revenue Control Laboratory, New Delhi, confirmed the presence of sulphur in combined form. It was also found that it did not possess thermoplastic or thermosetting properties when heated in air and did not show signs of becoming fluid up to 200°C and thereafter it started decomposing. It was also reported that the product produced a stable emulsion with vegetable oil. This decision of the Government, according to ‘HOECHST’ would hold goods even with reference to the 1975 Tariff Schedule.

(g)        Reference was made to a number of technical authorities and it was stated that for a product to be called a resin, it should be insoluble in water. The subject product was soluble in water. Therefore it was not a resin.

(h)       The lower authorities had gone wrong in assuming that Note 2 to Chapter 39 was applicable to the whole of Chapter 39. The said note, in terms, was with reference to ‘condensation, polycondensation, polyaddition, polymerisation and copolymerisation products’ - the articles spelt out in Headings 39.01 and 39.02 of the CCCN on which the Customs Tariff Schedule is based. The latter Schedule may have condensed the six entries in the CCCN, namely, 39.01 to 39.06 into one single heading but there could be no doubt as to the precise scope of application of chapter note 2 in the Customs Tariff Schedule. The lower authorities also fell into error by confusing sulphonated PVA, the product in the present dispute, with normal PVA.

(i)         Turning to question at para 6(c)(i), it was submitted that while PVA is a polymer, ‘Mowoil S50B’ is not. Firstly, a polymer must be a chain of identical monomer units. The subject product did not fit in with this concept because of the introduction of ‘sulpho’ groups but not in every monomer unit. In other words, it is not a chain of identical units. Secondly, Polyvinyl Acetate which is a product of polymerisation of vinyl acetate, is hydrolysed resulting in polyvinyl alcohol. PVA and also the subject product are, therefore, not products of polymerisation. Polymerisation ends at the Polyvinyl Acetate stage. Thereafter, what is done is hydrolysis or alcoholysis resulting in PVA and sulphonation of PVA.

(j)         Turning to the question at para 6(c)(ii), it was submitted that the process of hydrolysis or alcoholysis is not chemical synthesis. Sulphonation is a substitution reaction.

             It should be mentioned here that this point was not pressed much by the learned Counsel for Hoechst who submitted that the other two questions (i) and (iii) were, the more important ones.

(k)        The correct classification of the product is under Chapter 29. Chapter note 1(a) would not stand in way of this classification even though the structure of the product is not well defined.

(l)         If, however, it is held that Chapter 29 is not appropriate, then the next appropriate heading would be 38.01/19(1).

7. The submissions of Shri Sunder Rajan, on behalf of the Respondent, may be summarised as follows :-

(a)        Hoechst has not produced any literature of the manufacturer in support of the contention that the subject product is a modified form of PVA into which ‘sulpho’ groups have been introduced.

(b)        The declaration in the Bills of Entry was as Polyvinyl Alcohol which was also the description in the invoice - PVA in powder form. Chemical test also showed the product to the PVA and this has not been contested. Even Dr. Starck’s report refers to the product as PVA.

(c)        The patent does not refer to “Moviol S50B” specifically or by implication. The test report furnished by Italab Laboratories shows that the product is not capable of being moulded by heat. It will suffice if a product is mouldable or has plasticity under pressure. The fact that the product does not have plasticity under heat would not necessarily take it out of the category of resins or plastic materials.

(d)       The real question, according to Shri Sunder Rajan, is - are the goods “other polyvinyl derivatives” specifically mentioned in heading 39.01/06? Polyvinyl alcohol falls within Heading 39.02 of the CCCN as borne out by the Explanatory Notes at page 77, Volume 2. Note 2 to Chapter 39 (to which the learned Counsel for the appellants has referred) is applicable to the whole of the Heading 39.01/06 as is evident from the note itself which opens with the words “in heading No. 39.01/06 ......”. It is not, therefore, ‘permissible to limit the application of the said Chapter Note 2 to Headings 39.01 and 39.02 as contended by the Counsel for Hoechst.

(e)        Referring to the general notes on page 568 of Volume 2 of the CCCN under Chapter 39, it was submitted that mouldability is not the only criterion to determine whether a substance has the characteristic of plasticity. If the substance can be shaped by casting, extruding, rolling, etc., it is said to have plasticity.

(f)         The fact that the subject product is a derivative of PVA which is obtained from polyvinyl acetate (a product of polymerisation) would not detract from the character of PVA as a polymer. Reference was made to Brydson’s “Plastics Materials”, 4th edition,  (pp. 354 to 356) in support of the contention that Mowiol, a commercial polyvinyl alcohol, has plasticity since it can be cast into films.

             Reference was also made to other technical authorities to show that PVA can be compression-moulded.

(g)        Reference was made to an order of the Central Government in Review in the case of Ahura Chemical Products - 1981 (8) ELT 824 in support of the contention that plasticity is not a must for classification of a product under Chapter 39. Reference was also made to the Bombay High Court decision in the case of Chemicals & Fibres India Ltd. - 1982 (010) ELT 917 in which the Court has held that addition of delustrant would not take out polymer chips from the scope of Chapter 39 of the Customs Tariff Schedule and item No. 15A of the Central Excise Tariff Schedule. The ratio applies in the present cases. Reference was also made to the Tribunal’s order of 12-4-1983 in the case of Elpro International (Appeal No. 599/80-C) (un-reported decision) holding that chloro-sulphonated polythelene, even though a rubber, would still fall under Chapter 39.

(h)       There is nothing on record to show the characteristics of sulphonated PVA. No evidence has been adduced to show that PVA’s characteristics have been changed as a result of sulphonation.

(i)         Turning to the claim for classification under Chapter 29, reference was made to the fact that only separate chemically defined compounds are covered by the said Chapter. PVA being a polymer and the subject product being a sulphonated derivative of PVA are both of undefined chemical structures and, therefore, they do not fall under Chapter 39.

(j)         As regards the claim for classification under Chapter 38, it was submitted that the said Chapter takes in only chemical products and preparations not elsewhere specified or included. The subject product being more appropriately covered by Chapter 39 will not, therefore, fall under Chapter 38 because of the application of the Rules for interpretation 3(a) which is a part of the Tariff Schedule.

(k)        The argument that the subject product is put to an end-use which is not what normally plastics and resins are put to, is not relevant for the purpose of classification under Chapter 39 or Item No. 15A CET. Reference was made in this connection to 1975(10)LCX0016 Eq 1983 (013) ELT 1566. Dunlop and M.R.F. v. Union of India and Others.

(l)         Reference was then made to Customs Notification No. 29, dated  1-3-1981 and Central Excise Notification No. 129, dated 27-6-1981 which show clearly the classification of PVA under Chapter 39 and Item No. 15A CET.

8. In his reply arguments, the learned Counsel for Hoechst made the following further submissions :-

(a)        All reference to technical literature on normal PVA is irrelevant since the present product is sulphonated PVA.

(b)        The Central Government, in its order of 1971, had clearly held that the subject product did not have plasticity which meant that it could not be formed or shaped which is also what Dr. Starck’s report and the Patent say. The reports of the Italab Laboratories also confirm this position. Though Note 2 to Chapter 39, on first reading, is with reference to Heading No. 39.01/06, the products to which the note applies have been spelt out in the note itself and there can be no doubt that the note is meant to apply only to Headings 39.01 and 39.02 of the CCCN.

(c)        Even if the subject product is a PVA derivative, it is not a polymerisation product in that its molecule is not an agglomeration of identical monomer molecules.

(d)       The decision in 1981 (8) ELT 824 is not relevant here. For products like silicones and resols, plasticity is not relevant, but not to the products which are sought to be bought under the description “artificial plastics including artificial resins”. Similarly, the decision in 1982 (010) ELT 917 is not relevant since it pertained to a situation where a physical and not a chemical addition had taken place.

(e)        Notification No. 29-Cus., dated 1-3-1981 and 129-C.E., dated  27-6-1981, again, are not relevant here since those Notifications are with respect to normal PVA.

9. We have carefully considered the submissions of both sides. We have also perused the record.

10. The issue arising for determination in the present proceedings is whether the product imported by Hoechst, namely, “Mowiol S50B” is correctly classifiable under Chapter 39 of the Customs Tariff Schedule of 1975 in Heading 39.01/06 or under Chapter 29 in Heading 29.01/45(1) or under Chapter 38 in Heading 38.01/19(1). The concomitant issue is whether additional (countervailing) duty of Customs was leviable on the product with reference to Item 15A of the Central Excise Tariff Schedule.

11. At the outset, we would like to observe that the problem has to be resolved purely based on technical and scientific considerations. Trade or commercial parlance, as ordinarily understood, does not enter into the picture. Of course, the parlance in the technically knowledgeable trade i.e. those who manufacture the goods and those who use it for further manufacture of formulations or preparations understand technical or scientific parlance. For this proposition, we derive support from the Bombay High Court judgment in the case of Chemicals and Fibres of India Ltd., reported in 1982 (010) ELT 917 in which the Court held that since Chapter 39 employed highly scientific and technical terms, the words and expressions used therein must be construed with reference to scientific and technical parlance and not ordinary commercial parlance.

12. The product “Mowiol S 50B” is stated to be a special kind of polyvinyl alcohol (PVA). Special kind - because ‘sulpho’ groups are stated to have been introduced in the PVA chain. We have to note here that the manufacturers’ literature on the specific product under consideration has not been placed before us. Nor does the Patent Specification 513076 filed before us refers to the subject product by name. Dr. Starck, in his report dated 29-3-1975, has stated as  follows :-

“Mowoil S 50B is a special Polyvinyl Alcohol. Those Polyvinyl Alcohols (like Mowiol S 50B) which are prepared by the alcoholysis of Polyvinyl ester, are in powder form and dissolve in water, resulting in a high viscous solution. The products are insoluble in organic solvents. They find their application as water soluble productive celloids and emulsifying agents. Their application as a mouldable powder is out of the question.

The special type Mowiol S 50B is described in the patent DRP 745 683 and EP 513 076. By the special method of preparation, this Polyvinyl Alcohol contains chemically bound Sulpho-groups which enhance the dispersing properties. Naturally, such a product is completely unsuitable for the preparation of moulded articles, because any attempts to thermal deformation lead to decomposition and charring.”

13. As seen from Government of India’s Order No. 1293 of 1971, dated 7-5-1971, Government got a sample of the product tested in the Central Revenues Control Laboratory, New Delhi. The Laboratory’s report confirmed the presence of sulphur, in combined form. It was also found that it did not possess thermo plastic or thermo setting, property when heated in air and did not show sign of becoming fluid up to 200°C and thereafter it started decomposing. It was not possible for the laboratory to verify if the product was thermo plastic under pressure. It was also reported that it produced a stable emulsion with vegetable oil.

14. We have also seen the Italab Industrial Testing and Analytical Laboratories’ report No. 2639 dated the 8th April, 1965 as also Report No. 14002 dated 9th August, 1983, both on Mowiol, S50B. According to these reports, when the product was heated to 200°C, the sample began to char and gave out strongly acidic vapours, but did not melt. The reports also say that the sample was found to be water soluable. These 2 reports as well as report No. 14001, dated 9th August, 1983 contain an opinion that the sample cannot be classified either as a plastic moulding power or as resin

15. Against the above background, we now proceed to determine the classification of the product under the Customs Tariff Schedule of 1975. At the commencement of this exercise, we must mention that the Government of India, in its Revision-Order dated 7-5-1971 (referred to earlier), had taken the view that the product fell outside the scope of tariff items 82(6)(a)(i) and 82(6)(a)(iii) as they stood at the relevant time, under which additional (countervailing) duty of Customs was charged. The order also contains an observation that in view of the changes in the Central Excise Tariff, the product would attract countervailing duty under Central Excise Tariff item 15A(1)(ii) with effect from 1st March, 1964. Much reliance has been placed on this order by the learned Counsel for the appellants in support of his submission that the product is not a plastic material.

16. We have, at this stage, to note a difference between Items 82(6)(a)(i) and 82(6)(a)(iii) as they stood before 1-3-1964 and the current Customs Tariff Schedule in order to appreciate the submissions of the appellants. The former item read as follows :-

“82(6)(a)

Plastics, all sorts;

(i)       Moulding powders, granules and flakes

           (Thermo-setting and thermo-plastic);

(ii)      …………..

(iii)     All others.”

It can be readily appreciated that any substance to be classified under the above item had necessarily to be a plastic.

17. The learned Counsel for Hoechst has contended that “Mowiol S 50 B” does not fall within Chapter 39 of the Customs Tariff Schedule on several grounds. Firstly, the product is not plastic in character, as borne out by Dr. Starck’s report, the reports of Italab Laboratories and the report of the Central Revenues Control Laboratory. After considering all relevant factors, the Government, in its Order-in-Revision, dated 7-5-1971, had come to the definite conclusion that the product was not a plastic. Secondly, statutory Note 2 in Chapter 39 clearly lays down that a polymerisation product, in order to fall within heading 39.01/06 must answer to one or the other of 3 specified descriptions, the relevant one for the present purpose being “artificial plastics including artificial resins”. The subject product is neither artificial plastic nor an artificial resin. In support of the contention that it is not an artificial resin, reference has been made to the meaning of resin from several dictionaries and other authorities to show that resins are insoluble in water whereas the present product is soluble in water. Thirdly, it is contended that the subject product is not the result of chemical synthesis inasmuch as it has been produced not by the process of synthesis as understood in technical parlance but by alcoholysis of polyvinyl acetate and sulphonation. Fourthly, it is contended that the product is not at all a polymer since a polymer is a repetitive chain of identical monomer units whereas the present product has got sulpho groups introduced in the chain, but not in every monomer unit.

The learned Departmental Representative has controverted the aforesaid submissions.

18. Statutory Note 2 to Chapter 39 is very important for resolution of the dispute and, therefore, we set it out hereunder in extenso :-

“In. Heading No. 39.01/06 “condensation, polycondensation, polyaddition, polymerisation and copolymerisation products” are to be taken to apply only to goods of a kind produced by chemical synthesis answering to one of the following descriptions :

(a)        artificial plastics including artificial resins;

(b)        silicones:

(c)        resols, liquid polyisobutylene and similar artificial polycondensation or polymerisation products.”

19. We propose to proceed on the footing that the subject product does not have thermo-plastic or thermo-setting property under application of heat, as borne out by the different reports on samples of the product, including the report of the Central Revenues Control Laboratory. There is, however, no information on the point whether the product has get plastic properties under pressure. It is clear from the “Condensed Chemical Dictionary” (10th edition) revised by Gessner G. Hawley (page 821), that plastic is something capable of being shaped or moulded with or without the application of heat. In fact, the general notes appearing on page 563, Volume 2 of the CCCN, define artificial resins, and plastic materials as having the common characteristics of plasticity, i.e. of being capable or having been capable at some stage of being formed under external influence usually heat and pressure, if necessary, with a solvent or plasticiser, into shapes which are retained on the removal of the external influence. The shaping processes used include moulding, casting, extruding, rolling, etc. There is little doubt that polyvinyl alcohol (PVA) is a water soluble synthetic polymer which  forms fills by evaporation from water solution (see page 840 of the Condensed Chemical Dictionary by Gessner G. Hawley). As seen from pages 354 to 356 of Brydsons “Plastics Materials” (4th edition), PVA is employed for a variety of purposes. Films cast from acqueous alcohol, solution is an important agent in the manufacture of reinforced plastics. Techniques for making tubular blown films, similar to that used with polyethylene, have been developed. Moulded and extruded products which combine oil resistance, with toughness and flexibility, are produced from PVA in the USA. “The Handbook of Water-Soluble Gums and Resins” by Robert L. Davindson (extracts produced by the J.D.R.), also refer to PVA as a white powder synthetic resin and further that it is the only linear polydroxy polymer that is readily soluble in water. It adds that PVA is cast into films from water solution, made into fibres and moulded or extruded into various sheets, tubes, etc. that are used where oil and solvent resistance is required. All these show that PVA is a synthetic resin having plastic properties.

20. The Explanatory Notes under 39.02 of the CCCN (Page 577, volume 2) also specifically show poly vinyl alcohols as included in the category of polyvinyl derivatives falling under Heading 39.02.

21. The question would arise whether the subject product which is not exactly the same thing as PVA is a polyvinyl derivative. The answer has to be in the affirmative because it is, according to Hoechst’s admission, a sulphonated derivative of PVA, i.e. PVA in which sulpho-groups have been added by a chemical process. Heading 39.01/06 of the Customs Tariff Schedule, inter alia, includes polyvinyl acetate, polyvinyl chloro acetate and other polyvinyl derivatives. Polyvinyl alcohol is certainly a polyvinyl derivative and consequently the subject product, which is polyvinyl alcohol with ‘sulpho’ groups introduced into the PVA chain is also a polyvinyl derivative.

22. There has been much discussion on the point whether statutory note 2 to Chapter 39 is applicable to the entire Heading 59.01/06, as contended by the Departmental Representative or is limited in its application to that part of the heading “which corresponds to Headings 39.01 and 39.02 of the CCCN. In our view, this discussion is academic. For, as statutory Note 2 (extracted in para 18 above) itself makes it clear, the definition given is of the expression “condensation, poly-condensation, poly-addition, polymerisation and co-polymerisation products” occurring in Heading No. 39.01/06 and not to any other expression occurring in the said heading.

23. As stated earlier, there is no direct information on the point whether the subject product has got plasticity under application of pressure. However, this, in our view, does not pose a problem in the way of ascertaining the classification of the product. In accordance with the general notes appearing on page 568 of Volume 2 of the CCCN, it would suffice if the artificial resin has the characteristic of plasticity, i.e. of being capable or having been capable at some stage of being formed under external influence. At the PVA stage, plasticity characteristic was very much there and, therefore, the subject product would fit in with this concept. Apart from this, we also note from the Merck Index (9th edition) (extracts filed by the D.R.) that Mowiol is shown as a PVA and the use of PVA as a class is shown as in the plastic industry in moulding compounds, surface coatings, films, resistance to gasoline, etc. Also, on page 355 of “Plastics Materials” by Brydson, Mowiol is shown as a commercial polyvinyl alcohol and the use of PVA as a class is shown as for films cast from aqueous alcohol solution and moulded and extruded products. We cannot also lose sight of the fact that neither manufacturers’ literature on “Mowiol S 50B” has been produced before us nor the Patent literature spells out this product by name.

24. It has been contended by Shri Shanti Bhushan that “Mowiol S 50B” is not a polymerisation product at all. Polymerisation, according, to him, is the building up or aggregation in a chain of identical monomer groups. Since the subject product has got sulpho-groups introduced in the chain, but not in all the monomer groupings, it is urged that it is not a polymerisation product. In this connection, we may usefully refer to the patent specification No. 513076 which has been filed in support of the appellants’ case, though it does not refer to the subject product by name. The Patent states that -

“Various processes are already known for the manufacture of polymerisates in dispensed form by adding to the dispersion medium a substance having a dispersing action. As such substances there are known soap-like products, especially of a synthetic kind.

The effect of these substances is essentially caused by their surface activity and is due to their capacity for finely distributing the substance to be polymerised in the dispersion medium. Furthermore, substances are known which are capable of maintaining emulsified or dispersed bodies in fine distribution and preventing them from depositing. These substances are called protective colloids, such as gelatine, used for instance, for the stabilisation of a gold sol. Lately processes have become known for polymerising in the dispersed or emulsified form by using hydrophilic and water-soluble bodies of a high molecular weight, such as destrintragacanth, cellulose derivatives, polyvinyl alcohol and the like, instead of the so-called soap-like emulsifying agents referred to above. These bodies have no surface activity like that of the soap-like products named above but are only protective colloids, like gelatine, so that it is often not possible to obtain a very high degree of dispersion as is the case when soap-like bodies are applied. ….......

This invention relates to the production of aqueous emulsions or dispersions of very valuable properties by using as a dispersing or emulsifying agent a product obtained by introducing sulpho-groups into polyvinyl alcohol or a water-soluble derivative thereof. The sulpho-groups may be introduced by means of sulphonating agents, such as sulphuric acid, fuming sulphuric acid or chlorosulphonic acid, or by means of an aldehydesulphonic acid or some other organic body containing besides the sulpho-group another active group capable of reacting with the polyvinyl alcohol or water-soluble derivative thereof. .....

The advantage of a polyvinyl alcohol transformed in the manner described above as a dispersing agent, in comparison with pure polyvinyl alcohol, can be seen from the following :

“If it is attempted, for instance, to polymerise esters with addition of the usual catalysts, such as hydrogen peroxide, in the presence  of an aqueous solution of polyvinyl alcohol of the following general formula -

the polymerisation proceeds very slow and yields relatively coarse-grained products capable of being filtered from the aqueous liquor as-described in Specification No. 427 and 494. If, however, some sulphuric acid groups are introduced into polyvinyl alcohol which is present in the polymerisation medium, the polymerisation is considerably shortened and the polymerisate is obtained in a very finely dispersed form so that the reaction product is a stable emulsion which not deposit. It is surprising that polyvinyl alcohol shows the favourable effect described above even if, for instance, only one sulpho group is present for 500 CH₂ – CH – OH-groups. The degree of sulphonation has no upper limit, i.e., all the hydroxyl groups may be esterified with sulphuric acid. In practice, however, there are used product which are partially esterified, for instance up to about 50 per cent...........”.

25. It is seen from the above extracts that the inventions of the process (described in the Patent) themselves prescribe it as a process of polymerisation. It is by no means clear that they are describing the production of “Mowiol S 50B.” From the reference to the presence of sulphonated polyvinyl alcohol in the polymerisation medium, it appears that the Patent describes the production of some other commodity. We do not, therefore, see the relevance of the Patent in so far as ascertaining the process of manufacture of Mowiol S 50B is concerned. All that it enables us to gather is that polyvinyl alcohol with sulpho-groups introduced in the chain has certain special properties compared to normal polyvinyl alcohol.

26. Polymersation is, as seen from page 835 of the Condensed Chemical Dictionary by G. Hawley is “a chemical reaction usually carried out with a catalyst, heat or light, and often under high pressure, in which a large number of relatively simple molecules combine to form a chain-like macromolecule”. Undoubtedly, polyvinyl alcohol is a polymer of the monomer vinyl alcohol. Since, however, vinyl alcohol is highly unstable in its free state (and it immediately re-arranges itself to its tautomer-acetaldehyde), PVA cannot be built up from vinyl alcohol molecules by the traditional processes. It is, therefore, that vinyl alcohol is first converted to vinyl acetate which is polymerised to polyvinyl acetate, which, in turn, is subjected to alocoholysis resulting in polyvinyl alcohol. This, however, does not detract from the position that polyvinyl alcohol is a polymer of vinyl alcohol. To contend that it is a polymer but not a polymerisation product, is, in our view, mere play with words. The subject product, which is stated to be polyvinyl alcohol having sulpho groups introduced in the chain is, therefore, a polymerisation product.

27. Another point which was taken up before us by the learned counsel for Hoechst but not pressed much, is that the subject product is not a product of chemical synthesis. We state this argument only to reject it by observing that synthesis, as defined in the Condensed Chemical Dictionary by G. Hawley (page 989) is “creation of a substance which either duplicates a natural product or a unique material not found in nature, by means of one or more chemical reactions”. Nothing more needs to be said on this point.

28. The above discussions lead us to the conclusion that “Mowiol S 50B” falls for classification under Heading No. 39.01/06 of the Customs Tariff Schedule of 1975. It is not, therefore, necessary to consider the alternate classifications urged by Hoechst. Even so, we may observe that the product would not fall under Chapter 29 for the reason that Chapter Note 1(a) specifically provides that the Chapter is to be taken to apply only to separate chemically defined organic compounds whether or not containing impurities. Now, polymers are organic compounds of undefined structure [see Condensed Chemical Dictionary by Hawley - page 834, - “In most cases the number of monomers is quite large (3500 for pure cellulose), and often is not precisely known. In synthetic polymers this number can be controlled to a predetermined extent”]. In other words, a polymer does not have a definite and immutable chemical structure such as, for example, sodium chloride:Nacl. Therefore, the subject product would not fall within Chapter 29. Nor would it fall under Chapter 38 since that Chapter covers only chemical products and preparations not elsewhere specified or included. For the various reasons we have spelt out, the product also falls for classification under Item No. 15A of the Central Excise Schedule.

30. In the result, the appeals fail and are hereby rejected.

31. A copy of this order shall be placed in each of the appeal files.

32. Before parting with cases, we must place on record the invaluable assistance we have received from the learned Counsels of both sides in these cases.

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Equivalent 2004 (175) ELT 761 (Tri. - Del.)