RELIANCE CELLULOSE LTD Vs. COLLECTOR OF C. EX.

JUDGEMENT

(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.