Excisability of demineralized water turns on commercial identity, not mere treatment for boiler use.

Demineralized water used in boilers for fertilizer manufacture was held not to be a distinct excisable commodity under Chapter 28 of the Central Excise Tariff Act. The Tribunal reasoned that removing impurities such as calcium and magnesium to make water suitable for boiler use did not change its commercial identity, and no new article such as steam, vapour, ice, or any other separate excisable product emerged. Excisability depends on the emergence of a commercially distinct commodity, not merely on chemical treatment or improved suitability for a specific use. The demand was therefore unsustainable.

---

---

Issues: Whether demineralized water used in boilers in the manufacture of fertilizers is an excisable commodity classifiable under Chapter 28 of the Central Excise Tariff Act.

Analysis: The Tribunal followed its earlier majority decision on the same assessee and held that removing impurities such as calcium and magnesium to make water suitable for boiler use does not bring about a transformation into a different commercial commodity. The character of the product remains water, and there is no emergence of steam, vapour, ice, or any other distinct excisable article.

Conclusion: Demineralized water used in the boilers is not a distinct excisable commodity classifiable under Chapter 28 of the Central Excise Tariff Act, and the demand could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A product does not become excisable merely because it is chemically treated or made more suitable for a particular use; excisability requires emergence of a commercially distinct commodity.

---