V.T. Raghavachari, Member (J) - (1.)UNDER notice dated 18 -5 -1983 the appellants M/s. Reliance Cellulose Products Ltd., were called up to show cause why the 3 products (1) bleached cotton linters, (2) cellulose powder and (3) micro -crystalline cellulose powder ought not be classified under Item -68 CET and duty demanded on removal thereof. The appellants had shown these products as non -excisable in their classification list. The appellants replied denying excisability. On adjudication the Assistant Collector under his order dated 24 -9 -1983 ordered classification under Item -68 CET. This was confirmed, on appeal, by the Collector (Appeals) under his order dated 12 -3 -1984. This appeal is against the said order.
(2.)WE have heard Shri V. Jogayya Sarma, Advocate for the appellants and Shri L.C. Chakraborty for the Department.
(3.)THE main contention for the appellants, before the lower authorities as well as before us, has been that raw cotton linters are merely cleaned and impurities removed therefrom to obtain bleached cotton linters and the same is subsequently merely ground into powder without any other change of characteristics in order to obtain cellulose powder and micro crystalline cellulose powder. It is contended that since thus the process to which the cotton linters were merely in the nature of purification for removal of im purities and conversion into a different form without change of physical or chemical characteristics, these processes would not amount to manufacture in order to attract ex cise duty. The case for the Department on the other hand is that chemical reaction does in fact take place in the course of alleged purification and that the subsequent conver sion into powder or micro -crystalline cellulose powder form would also amount to manufacture since they lead to the emergence of a different product having a distinct name, character and use.
In the show cause notice it had been mentioned that the process of convert ing cotton linters into bleached cotton linters pulp is a manufacturing process and that the physical and chemical properties of the bleached cotton linters are not similar to the raw linters. It is further mentioned that the cellulosic part of the raw linters, on treat ment with caustic solution, becomes sodio -cellulose which on hydrolysis becomes celulose which has separate physical properties including ready absorption of dyes which property untreated cellulose does not have. In their submissions before the Asst. Collr. the appellants had questioned this and stated that the purification of the raw cotton linters and the bleaching thereof did not involve any chemical change but only physical change by removal of impurities. They in fact further stated that if the impurities so removed are subsequently added to the purified bleached product the original impured products would again emerge. On the other hand Shri Chakraborty points out that a separation of cellulose from the original linters (in order to subsequently convert the same into cellulose powder and microcrystalline powder involves the removal of lignin from the linters and that such removal can be only by way of chemical reaction. In this connection he draws our attention to page 615 of the Condensed Chemical Dictionary (10th Edition Revised by G.G. Hawley). Under the heading lignin it is mentioned there in as follows: Lignin:

"A phenylpropane polymer of amorphous structure comprising from 17 30% of wood. It is so closely associated with the holocellulose which makes up the balance of woody material that it can be separated from it only by chemical reaction at high temp. It is believed to function as a plastic binder for the holocel lulose fibres. It is recovered from wood -processing waste in limited amounts."