Spent sulphuric acid treated as excisable goods, classified under Heading 28.07, with Modvat credit retained on clearance.

Spent sulphuric acid generated during manufacture of acid slurry was treated as excisable goods because it had marketable characteristics and the Tribunal followed the Larger Bench view on levy. It was also classified under Chapter Heading 28.07 on the same settled tariff approach. On Modvat credit, the Tribunal held that clearance of the spent sulphuric acid on payment of duty did not require reversal of credit already taken on inputs used in its manufacture. The appeal therefore failed on all substantive issues, confirming duty liability, tariff classification, and retention of Modvat credit.

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Issues: (i) whether spent sulphuric acid generated during manufacture of acid slurry is goods exigible to central excise duty; (ii) whether it is classifiable under Chapter Heading 28.07; (iii) whether Modvat credit taken on inputs used in its manufacture is liable to be reversed at the time of clearance of the spent sulphuric acid.

Issue (i): whether spent sulphuric acid generated during manufacture of acid slurry is goods exigible to central excise duty.

Analysis: The Tribunal followed the Larger Bench view that spent sulphuric acid has the characteristics of goods for levy purposes and there was no contrary decision requiring a different view.

Conclusion: Yes. Spent sulphuric acid is goods and is liable to central excise duty.

Issue (ii): whether it is classifiable under Chapter Heading 28.07.

Analysis: The Tribunal applied the Larger Bench ruling on the appropriate tariff entry and accepted the classification indicated therein.

Conclusion: Yes. Spent sulphuric acid falls under Chapter Heading 28.07.

Issue (iii): whether Modvat credit taken on inputs used in its manufacture is liable to be reversed at the time of clearance of the spent sulphuric acid.

Analysis: The Tribunal followed the Larger Bench decision that clearance of the spent sulphuric acid on payment of duty does not require reversal of the Modvat credit already taken on the inputs used in its manufacture.

Conclusion: No. Modvat credit is not required to be reversed on such clearance.

Final Conclusion: The appeal failed on all substantive issues and the findings affirmed duty liability, tariff classification under Heading 28.07, and retention of Modvat credit.

Ratio Decidendi: A by-product that is marketable and answerable to a tariff heading is goods for excise purposes, and where the tribunal's settled view so provides, Modvat credit on inputs used in its manufacture need not be reversed on clearance of the by-product on payment of duty.

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