Classification of contaminated mercury as marketable mercury, not waste, sustained central excise duty on clearance.

Contaminated mercury used as a cathode in the manufacture of caustic soda remained classifiable as mercury under Chapter 28, even though it contained impurities. The tariff note treated chemical elements with impurities as classifiable under that chapter, and the chapter note recognised that treatment making goods marketable could amount to manufacture. Because the assessee cleared the product as mercury and not as waste, it could not avoid central excise duty by characterising it as a waste product. The absence of a provision similar to Rule 57F(4) did not alter the classification or duty position, and the clearance was held dutiable.

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Issues: Whether contaminated mercury cleared after use as an input in the manufacture of caustic soda was liable to central excise duty, or whether it was a waste product not exigible to duty.

Analysis: The mercury was used as a cathode in the electrolytic process for manufacture of caustic soda and was later cleared as mercury only. The relevant tariff note treated separate chemical elements, even with impurities, as classifiable under Chapter 28, and the further note on Chapter 28 recognised treatment rendering goods marketable as manufacture. Since the assessee itself cleared the product as mercury and not as waste, it could not avoid duty by describing it as waste. The absence of a provision analogous to Rule 57F(4) did not change the position on classification and duty liability.

Conclusion: The clearance of the contaminated mercury attracted central excise duty and the plea that it was waste was rejected.

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