Marketability and excise duty on waste filter cake: residue found non-excisable as a waste product, not a manufactured commodity.

Waste filter cake generated as an exhausted filter aid in the manufacture of chemical additives was treated as a waste product with negative commercial value, not a manufactured commodity. The record, including technical reports and prior factual findings, showed no evidence that it was sold or capable of being bought and sold in the form in which it emerged. The applicable excise principle was that mere sale does not itself establish marketability, and a residue or waste material is not excisable merely because it contains recoverable constituents. It was therefore held non-excisable and not classifiable for central excise duty.

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Issues: Whether waste filter cake generated during the manufacture of chemical additives is a manufactured, marketable and excisable commodity classifiable under heading 3824.90, so as to attract central excise duty.

Analysis: The waste filter cake arose only as an exhausted filter aid after filtration in the manufacturing process. The material on record, including technical reports and the earlier factual findings, showed that it was a waste product with negative commercial value and no evidence established that it was sold or capable of being bought and sold in the market in the form in which it emerged. The reasoning also proceeded on the settled principle that mere sale does not by itself make a product marketable for excise purposes, and that a residue or waste material which is not a manufactured product cannot be treated as excisable merely because it contains some recoverable constituents.

Conclusion: Waste filter cake was correctly held to be non-excisable and not classifiable for levy of central excise duty.

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