2017 (8) TMI 1340 - AT - Central Excise

Liability of duty - by-product Spent Sulphuric Acid - Fabric brightener - N/N. 89 of 1995 dated 18/09/1995 - Held that - Tribunal in Keti Chemicals 1999 (7) TMI 91 - CEGAT COURT NO. III NEW DELHI while examining the similar product held that the Spent Sulphuric Acid should be considered as a waste - the product held to be by-product - no duty liability arises. Fabric brightener - Held that - the impugned order recorded the process undertaken by the respondent as only diluting of raw material - Relying on the decision of the tribunal in Jyoti Laboratories 1993 (8) TMI 196 - CEGAT NEW DELHI impugned order held that no process amounting to manufacture has happened in the present case - duty liability do not arise. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Duty liability on Spent Sulphuric Acid under Central Excise Tariff heading 2807 for area based exemption.
2. Tax liability of the respondent regarding fabric brightener.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner (Appeals) regarding the duty liability on Spent Sulphuric Acid, a byproduct in the manufacture of Detergent Cake/ Detergent Powder. The dispute revolved around whether the Spent Sulphuric Acid should be considered a waste product or not. The impugned order exempted it as waste under Notification No. 89 of 1995. The Ld. AR argued that as the acid had commercial value and was cleared by the respondent, it should not be considered waste. However, the Ld. Counsel for the respondent contended that commercial value alone does not exclude a product from being classified as waste, citing the Tribunal's decision in Keti Chemicals. The Tribunal, after reviewing the impugned order and the facts of the case, upheld the exemption under Notification No. 89 of 1995, finding no grounds to interfere with the Commissioner's decision. The appeal by the Revenue was dismissed as there was no merit in challenging the finding regarding Spent Sulphuric Acid.

2. The second issue involved the tax liability of the respondent concerning fabric brightener. The impugned order concluded that the respondent did not manufacture the fabric brightener but only diluted it, which did not constitute manufacturing. This decision was supported by the Tribunal's ruling in Jyoti Laboratories. After careful consideration, the Tribunal agreed with the impugned order's finding on the fabric brightener issue. Consequently, the appeal of the Revenue was dismissed, affirming the decision of the impugned order.