2004 (11) TMI 426 - AT - Central Excise

Waste Transformer oil and Trichloroethylene waste - Classification of - Dutiability - Marketability

Summary

Issues:
Levy of duty on waste Transformer oil and waste Trichloroethylene without payment, Marketability of waste oil, Applicability of Rule 57F(4)(a) of CE Rules, 1944, Admissibility of Modvat credit, Classification of waste under heading 2710.90, Evidence of marketability of waste oil.

Levy of Duty on Waste Transformer Oil and Waste Trichloroethylene:
The appeal challenged the demand for duty on waste Transformer oil and waste Trichloroethylene cleared without payment, contending that the waste should not be subjected to duty as it was processed and became waste after initial payment of duty on the original products. The department argued that the waste oil was marketable and provided evidence supporting its marketability. The tribunal upheld the duty demand, citing Rule 57F(4)(a) of the CE Rules, 1944, allowing removal of waste on payment of duty if Modvat credit was taken, and supported the decision with the precedent of DCW Ltd. v. CCE, Madurai.

Marketability of Waste Oil:
The appellants claimed that the waste oil was not marketable, while the department presented evidence indicating the marketability of waste oil, including its resale for retail trade and use by farmers for motor starters. The tribunal noted the evidence of trading in waste oil, rejecting the appellants' contention that the waste was not marketable. The decision was based on the Modvat credit taken on the original products and the marketability of the waste oil, as supported by the precedent of DCW Ltd. v. CCE.

Applicability of Rule 57F(4)(a) of CE Rules, 1944:
The tribunal considered Rule 57F(4)(a) of the CE Rules, 1944, which allows removal of waste on payment of duty if Modvat credit was availed on the inputs. The tribunal upheld the duty demand based on this rule and the fact that waste oil was found to be marketable, in line with the provisions of the rule.

Admissibility of Modvat Credit:
The appellants had availed Modvat credit on Transformer oil and Trichloroethylene, which was a crucial factor in the duty demand on the waste generated from these inputs. The tribunal considered the Modvat credit availed by the appellants and its impact on the duty liability for the waste products.

Classification of Waste under Heading 2710.90:
The lower authorities had classified the waste oil under heading 2710.90 for charging duty, which was challenged by the appellants. The tribunal upheld the classification based on the marketability of the waste oil and its removal without payment of duty after availing Modvat credit on the original products.

Evidence of Marketability of Waste Oil:
The tribunal reviewed the evidence presented by the department regarding the marketability of waste oil, including its resale for retail trade and use by farmers, which contradicted the appellants' claim of non-marketability. The tribunal relied on this evidence to support the decision upholding the duty demand on the waste oil, emphasizing its marketable nature as a key factor in the judgment.