Exemption for carbon sludge obtained in an effluent treatment plant upheld; tariff classification alone did not defeat eligibility.

Exemption under Notification No. 76/86-C.E. turned on the true nature of the cleared product and the manner in which it was obtained; the evidence showed it was carbon sludge, not carbon dust, and the sample was described as an aqueous paste of carbon dust. The preparation, reaction, agitator and settling tanks were treated as an effluent treatment plant, supported by the Pollution Control Board certificate, so the sludge was held to be obtained in such a plant and eligible for exemption. Tariff classification as carbon did not defeat the benefit because the notification did not make classification the governing .

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Issues: Whether the cleared product was sludge eligible for exemption under Notification No. 76/86-C.E. dated 10-2-1986 and whether it was obtained in an effluent treatment plant.

Analysis: The evidence showed that the product cleared was not carbon dust but carbon sludge. The explanation given for the description in invoices was accepted, and the Chemical Examiner's report described the sample as an aqueous paste of carbon dust, which supported the assessee's case that the clearance was in the form of sludge. The record also showed that the preparation tank, reaction tank, agitators and settling tank constituted an effluent treatment plant, and the Pollution Control Board certificate supported that position. The fact that the goods were classified as carbon under CET SH 2803.00 did not affect exemption eligibility because the notification did not make the benefit dependent on tariff classification.

Conclusion: The product was sludge obtained in an effluent treatment plant and was eligible for the exemption under Notification No. 76/86-C.E. dated 10-2-1986.

Ratio Decidendi: For exemption under the notification, the true nature of the cleared goods and the manner in which they are obtained are decisive, and tariff classification by itself does not defeat eligibility when the notification does not make classification the governing condition.

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