Spent sulphuric acid treated as a manufactured product, with Modvat credit allowed on the full input quantity.

Spent sulphuric acid arising in the sulphonation process was treated as a manufactured product and classifiable under Heading 28.07 of the Central Excise Tariff, following binding Larger Bench precedent. On the Modvat issue, credit was held admissible on the entire quantity of sulphuric acid used in producing the spent acid, again in line with the earlier Larger Bench ruling. The common order therefore applied the settled precedent to uphold the classification and allow Modvat credit relief to the assessee.

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Issues: (i) Whether spent acid arising in the sulphonation process was a manufactured product classifiable under Heading No. 28.07 of the Central Excise Tariff. (ii) Whether the assessees were entitled to Modvat credit on the entire quantity of sulphuric acid used in the production of spent acid.

Issue (i): Whether spent acid arising in the sulphonation process was a manufactured product classifiable under Heading No. 28.07 of the Central Excise Tariff.

Analysis: The issue was found to be covered by the Larger Bench decision in Collector of Central Excise v. Keti Chemicals & Others, which held that spent sulphuric acid is a manufactured product and falls under Heading No. 28.07. The same reasoning was followed for the present appeals.

Conclusion: The spent acid was a manufactured product and was classifiable under Heading No. 28.07 of the Central Excise Tariff.

Issue (ii): Whether the assessees were entitled to Modvat credit on the entire quantity of sulphuric acid used in the production of spent acid.

Analysis: The Larger Bench decision also resolved this issue in favour of the assessee by holding that credit was admissible on the entire quantity of sulphuric acid used in manufacturing the spent acid. That view was followed in the present matter.

Conclusion: The assessees were eligible for Modvat credit on the entire quantity of sulphuric acid used in the production of spent acid.

Final Conclusion: The common order applied binding Larger Bench precedent and sustained the classification of spent acid as a manufactured product while also granting Modvat credit relief to the assessee.

Ratio Decidendi: Where spent sulphuric acid emerges as a manufactured product in the sulphonation process, it is classifiable under Heading No. 28.07 of the Central Excise Tariff and Modvat credit is admissible on the entire quantity of sulphuric acid used in its production.

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