2004 (2) TMI 512 - AT - Central Excise

Summary

Issues:
1. Dispute over whether effluents drained into canals are liable to duty.
2. Interpretation of marketability of effluents for duty imposition.
3. Application of Rule 57F(5) to clearance of drained effluents.

Analysis:

Issue 1: The appeal challenges the acceptance by the Commissioner of the appellant's plea that effluents drained into canals during the manufacturing process are not subject to duty. The appellant, engaged in manufacturing Sulphamethaxozle, argued that the effluents had to be drained out as they were not marketable. The Commissioner confirmed duty on admitted clearance and rejected the Revenue's claim of marketability of the drained effluents.

Issue 2: The Revenue contended that since the appellant admitted clearance for a portion of the effluent, the entire effluent should be considered marketable and subject to duty. However, both the Commissioner and the Tribunal found no evidence of clandestine removal or marketability of the drained effluents, leading to the dismissal of the Revenue's argument.

Issue 3: The Tribunal agreed with the Commissioner's view that effluents cannot be treated as inputs under Rule 57F(5) for duty purposes. The effluents were deemed to be a mixture of spent input and organic compounds resulting from the manufacturing process, not falling under the category of input wastage. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner's decision regarding duty on the cleared effluents.

In conclusion, the Tribunal upheld the Commissioner's decision, ruling against the Revenue's appeal and confirming that the drained effluents were not liable to duty due to lack of evidence of marketability and their nature as a byproduct of the manufacturing process.