Rule 57CC does not apply to pressmud waste from sugar manufacture where no exempt final product exists.

Pressmud arising as waste in sugar manufacture was not a manufactured or excisable final product, so it could not be treated as a second final product to trigger Rule 57CC. That rule applies only where common inputs are used to produce one dutiable final product and another nil-rated or exempt final product; because pressmud had already been treated as waste in prior tribunal decisions, the condition precedent for demanding an amount equal to 8% of its value on clearance was absent. The demand was therefore unsustainable and the assessee succeeded.

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Issues: Whether pressmud emerging as waste in the manufacture of sugar could be treated as a second category of final product so as to attract Rule 57CC and require payment of an amount equal to 8% of its value at clearance.

Analysis: Rule 57CC applies only where a manufacturer produces one dutiable final product and another final product chargeable to nil rate of duty or exempted duty, with common inputs used for both. The disputed product had already been treated in prior tribunal decisions as pressmud waste and not as a manufactured product. Once pressmud is not a manufactured and excisable product, it cannot be brought within the category of a nil-rated or exempt final product for the purpose of Rule 57CC. The condition precedent for demanding 8% of value under that rule was therefore absent.

Conclusion: Rule 57CC was held inapplicable to pressmud and the demand was unsustainable, in favour of the assessee.

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