1998 (8) TMI 210 - AT - Central Excise

Appellate Tribunal Exempts Bag House Waste from Excise Duty

COLLECTOR OF CENTRAL EXCISE, AHMEDABAD Versus AMOL DECALITE LIMITED

COLLECTOR OF CENTRAL EXCISE, AHMEDABAD Versus AMOL DECALITE LIMITED - 1999 (105) E.L.T. 222 (Tribunal) Issues Involved:Whether waste product known as Bag House fine, obtained during the process of manufacturing filter aid powder is an excisable product.Comprehensive Analysis:Issue 1: Classification of Waste ProductThe primary issue in this case revolved around the classification of the waste product known as Bag House fine, generated during the manufacturing process of filter aid powder. The Assistant Commissioner initially classified the waste as filter aid powder, subject to excise duty under Heading 28.51. However, a subsequent order by the Assistant Collector reclassified the waste under sub-heading 3802.00, considering it as a chemical product. On appeal, the Commissioner (Appeals) set aside the earlier orders, emphasizing that the waste product was not marketable as filter aid powder and had accumulated in substantial quantities on the manufacturing premises.Issue 2: Excisability of Waste ProductThe debate also centered on whether the Bag House fine waste product qualified as an excisable product under Section 2(f) of the Central Excise Act. The Revenue argued that since the waste arose as a by-product during the manufacturing process and was sold in the market, it should be considered excisable goods. The Respondent, on the other hand, contended that the waste was not usable as filter aid powder, had limited marketability, and did not fit into any specific entry in the Central Excise Tariff Act for duty imposition.Issue 3: Marketability and Duty ImpositionThe crux of the matter was the marketability of the waste product and its classification under the Central Excise Tariff Act. The Advocate for the Respondent highlighted various legal precedents emphasizing that mere sales of a product do not automatically make it a marketable commodity for excise duty purposes. The absence of a specific entry in the tariff for waste products like Bag House fine was a significant argument against levying excise duty on the waste.Judgment and ConclusionThe Appellate Tribunal, after considering the arguments from both sides, ruled in favor of the Respondent. The Tribunal held that the waste product, Bag House fine, did not qualify as excisable goods under the Central Excise Act. It emphasized that the waste was not usable as filter aid powder, lacked a regular market, and did not fit into any specific entry in the Central Excise Tariff Act for duty imposition. The Tribunal rejected the Revenue's appeals, citing the absence of material evidence to dispute the nature of the waste as reported by the Chemical Examiner and the lack of marketability for the product.In conclusion, the judgment clarified the classification and excisability of the waste product, Bag House fine, and established that the absence of a specific entry in the tariff, coupled with limited marketability and unsuitability for its intended purpose, rendered the waste non-liable for excise duty.