Cinder from coal used in boilers is not an excisable manufactured item under old tariff item No. 68, the HC held.

Half-burnt coal ash or cinder generated in the use of coal in a boiler for electricity generation was treated as a waste or by-product, not a manufactured excisable item. Applying binding precedent under the old tariff regime, the HC held that such cinder was not chargeable to excise duty under tariff item No. 68. The levy was therefore not sustainable, and the petition was allowed.

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Issues: Whether half-burnt coal ash or cinder generated in the use of coal in a boiler for electricity generation was liable to excise duty under the old tariff item No. 68.

Analysis: The demand was challenged on the ground that cinder was only a waste or by-product and did not amount to a manufactured excisable item. The dispute was confined to the old tariff regime. The Court noted that the point was covered by binding precedent holding that such cinder is not liable to excise duty under tariff item No. 68.

Conclusion: The levy of excise duty on cinder was held not sustainable and the petition was allowed.

Ratio Decidendi: A waste or by-product such as cinder arising from the use of coal in a boiler is not a manufactured excisable item and is not chargeable to duty under old tariff item No. 68.

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