2008(06)LCX0072

In the Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Ms. Jyoti Balasundaram, Vice President Shri A.K. Srivastava, Member (Technical)

Commissioner of Customs (I), Mumbai

Versus

Grasim Industries Ltd.

Final Order No. A/344/WZB/2008-CI/CSTB dt. 25.6.2008 certified on 3.7.2008 in Appeal No. C/1424/2002-Mum.

Advocated By -

Shri P.K. Katiyar, SDR for Appellant
Shri Manoj Sanklecha, Adv. for Respondent

Per Jyoti Balasundaram :

The respondents herein imported Alpha-Cellulose Grade Arbocel and filed bill of entry in June, 1996 seeking classification under CTH 4704.21 as "chemical wood pulp". The goods were permitted clearance on execution of bond and samples were sent to the Deputy Chief Chemist for test and vide his report dated 11.7.1996, the Deputy Chief Chemist opined that "the sample is fluffy white powder composed of cellulose. It is cellulose powder." In the light of the above, show cause notice proposing classification of the goods under CTH 3912.90 which covers "Cellulose and its chemical derivatives, not elsewhere specified or included, in primary forms" and proposing recovery of differential duty of Rs. 3,27,992/- @ 30% + 5% + 18% CVD, was issued. The Assistant Commissioner applied the provisions of Rule 3 (b) of the General Rules for Interpretation of the Tariff to hold that the goods would fall for classification under CTH 3912.90 which was in conformity with the test report. The Commissioner (Appeals) set aside the adjudication order, accepting the contention of the assessees for classification under CTH 4704.21, on the ground that Chapter 39 broadly deals with plastics and articles thereof, which are obtained by the process of chemical synthesis whereas Chapter 47 deals with pulp of wood or other fibrous cellulosic material etc. and thus covers goods obtained from various vegetable materials or from waste textiles of vegetable origin and since the imported goods were obtained from wood pulp, Chapter 47 of the First Schedule to the Customs Tariff was the appropriate heading under which the goods would fall. Hence this appeal by the Revenue.


2. We have heard both sides.


3. The respondents have themselves admitted that the imported goods are derivatives of wood pulp, obtained by the sulphite wood pulp process, after removal of the soluble portion of cellulose by sodium hydroxide treatment. (The imported item was required in caustic soda manufacturing process with membrane cell technology). Since the goods are not chemical wood pulp but manufactured therefrom, they cannot be classified under CTH 4704.21. In the absence of any dispute that the goods are cellulose in primary form (powder is recognised as a primary form), the goods will be classifiable under the heading proposed by the Revenue, viz. CTH 3912.90, and the finding of the Commissioner (Appeals) that, for determining classification of the impugned goods, their origin is important, is not relevant in this case for the reason that the goods are specifically covered under CTH 39.12. (It is also pertinent to note that the HSN Explanatory Note to Heading 39.12 describes cellulose as a carbohydrate of high molecular weight, forming the solid structure of vegetable matter). We accordingly set aside the impugned order of the Commissioner (Appeals), and allow the appeal.

Pronounced in Court on 25.6.2008.

Equivalent 2008 (088) RLT 0080 (CESTAT-Mum.)

Equivalent 2009 (233) ELT 0076 (Tri. - Mumbai)