2008 (8) TMI 618 - AT - Central Excise

Biocompost - Excisability - Pressmud - Held that - pressmud is a waste material. This material was mixed with effluents from the distillery to get biocompost. An admixture of two waste materials is also a waste material - thus, biocompost is only a waste material not exigible to duty of excise and, therefore, Rule 57CC was not to be invoked in this case - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Dropping of demand under Rule 57CC of the Central Excise Rules, 1944 regarding 'pressmud' clearance.
2. Challenge against dropping of demand for 'biocompost' prepared by mixing 'pressmud' with distillery effluents.

Analysis:
1. The first issue pertains to an appeal by the Revenue against the dropping of a demand under Rule 57CC of the Central Excise Rules, 1944 related to the clearance of 'pressmud' by the respondents. The original authority had imposed a demand of 8% of the price of 'pressmud' cleared by the respondents, alleging that 'pressmud' was cleared as an exempted final product along with dutiable final products without maintaining separate accounts for common inputs. However, the appellate authority set aside the demand, determining that 'pressmud' was a waste material not excisable. The Revenue appealed against this decision, which was dismissed by the appellate Tribunal. The Tribunal upheld the appellate Commissioner's decision that 'pressmud' is not excisable, citing a previous ruling. Thus, the demand under Rule 57CC was deemed inapplicable in this case.

2. The second issue involves challenges against the dropping of a demand for 'biocompost' created by mixing 'pressmud' with effluents from the distillery. The Revenue contended that 'biocompost' was an excisable product resulting from the combination of waste materials from the two units. However, the lower appellate authority determined that 'biocompost' was only a waste material and not excisable, despite its classification under Heading 31.01 of the CETA Schedule. The Revenue argued that 'biocompost' should be charged at a 'Nil' rate of duty under Heading 31.01, making Rule 57CC applicable. The Tribunal upheld the lower appellate authority's decision, stating that 'biocompost' was also a waste material, as it was created by mixing two waste materials. Therefore, Rule 57CC was not applicable in this scenario, leading to the dismissal of the appeals challenging the dropping of the demand for 'biocompost'.

In conclusion, the Tribunal's judgments in both issues affirmed that 'pressmud' and 'biocompost' were waste materials not subject to excise duty, thereby rejecting the Revenue's demands under Rule 57CC. The decisions were based on the nature of the materials involved and their classification as waste products, ultimately leading to the dismissal of the Revenue's appeals.