H.R. Syiem, Member (T)

1. This is an appeal against order-in-appeal No. W08/82 dated 7.8.1982. The appeal in respect of six appeal Nos. CD/SB/1670/86-C to L675/86-C were filed beyond time. After hearing the two sides on the request for condonation of delay made by the appellant's counsel, the Bench condoned the delay, and proceeded with the hearing of the appeals. One party by name M/s. Intercraft Pvt. Limited is said not to have filed any appeal after Tribunal's order No. 117/86 dated 28.7.1986. Mr. Krishnamurthy states that his arguments would be in respect only of the six appeals.

2. The learned counsel for the appellants Mr. Krishnamurthy began his address by saying that there is nothing in the law to support assessment under item 15A(1)(ii) of the central excise tariff. The only correct item for assessment is sub-item 2 as "Articles of Plastic" because polyinyl alcohol is a modification of polyvinyl acetate and has been turned into an article i.e. a powder, which is used in textile industries, in sizing yarns, fabrics, and so on. The appellants have contested the assessment of PVA as a polyvinyl derivative. The learned counsel very vehemently declared that it is not a derivative because it is obtained by alcoholysis of hydrolysis. These processes are not polymerisation or co-polymerisation processes and therefore, it is not possible to fit PVA as a polyvinyl derivative with other polyvinyl derivatives. Derivatives that fit under item 15A(1)(ii) must be products of polymerisation or co-poly merisation.

3 The learned counsel quoted the CONDENSED CHEMICAL DICTIONARY By G. HAWLEY 9th Edition, according to which PVA is produced by alcoholysis or hydrolysis of polyvinyl acetate which alone is a product of polymerisation. The process of manufacture of PVA involves replacement of the acetate groups with hydroxyl groups, and the alcolysis proceeds most rapidly in a methanol methyl' acetate mixture in the presence of catalytic amounts of alkali or mineral acids, a far different process from polymerisation or co-polymerisation. It is necessary, said the learned Counsel, that the goods to be fitted in the sub-item must be of the same nature as others, because item 15A at the time, had as its heading "The following artificial or synthetic resins, namely"; the presence of the word namely circumscribe the nature and kind of artificial plastic and resins to only those listed and named. Sub-item 15A(1)(ii) will therefore, cover only those derivatives which are produced by polymerisation and co-polymerisation. The presence of the words "such as" in the sub-item reinforces the select nature of articles and substances to be assessed in this subheading. Goods like polyacrylic and polymethacrylic derivatives are specifically mentioned after the words "other polyvinyl derivatives". Coumarone and indene resins which are derived by heating a mixture of coumarone and indene with sulphuric acid are accordingly covered also. Those products that do not result directly from the process of polymerisation and co-polymerisation but are intended to be covered by the sub-item are specifically mentioned; PVA is not so specified.

4. He quoted from the book "PRINCIPLE OF POLYMER SYSTEM By Ferdinand Rodrigez" which observes "Even Poly (vinyl alcohol) cannot be made directly, because the monomer is unknown (isomeric with acetaidehyde). Thus it is necessary to first polymerise vinyl acetate, then hydrolize the polymer to the polyalcohol. Finally, the alcohol is esterified by cinnamic acid (functionally of one in an esterification)". He next quoted from the same book, on Polymer Modification thus : "Whenever a polymer is formed in several stages, each subsequent stage is a kind of polymer modification. All cross-linking reactions (vulkanisations) of rubbers would fall in this category together with the moulding of network polymer like the phenol formaldehyde resins. However, the term "polymer modification" is used here to mean changes wrought by the polymer manu