2008 (9) TMI 172 - AT - Central Excise

Kettle Residue emerging during the process of manufacture of MMA (Mono Methyl Acrylate) dutiability - No evidence has been put forth to show that it is a new product with distinct characteristic, name and identity - No evidence of marketability has been produced by the Revenue - Just because the appellants have been able to find use, it cannot be said that it is marketable - therefore it cannot be said that Kettle residue is excisable

Summary

Issues: Determination of excisability and liability to central excise duty of kettle residue arising during the manufacture of MMA under subheading 3824.90 of the Central Excise Tariff Act.

Analysis:
1. Nature of Kettle Residue: The appellant argued that kettle residue is not a consciously manufactured product but a waste arising during the manufacturing process, comprising a complex mixture without distinct commercial identity. The chemical examiner's report supported this claim, emphasizing the absence of fixed composition. The appellant cited precedents to assert that items like dross, waste, or scrap are not necessarily excisable.

2. Marketability and Use: The Revenue contended that the use of kettle residue, either by the manufacturer or others, indicated marketability and utility, citing the Keti Chemicals case where spent sulfuric acid was deemed dutiable. The Revenue highlighted the Supreme Court's stance that marketability is not confined to local sales or widespread availability, supporting the argument that kettle residue is excisable.

3. Judicial Precedents: Both parties referenced various judgments to support their positions. The appellant relied on cases where similar waste or by-products were deemed non-excisable, emphasizing the lack of market evidence. In contrast, the Revenue cited cases where items with commercial utility were held excisable, reinforcing the importance of marketability criteria.

4. Decision: The Tribunal analyzed the evidence presented and concluded that the kettle residue did not meet the essential criteria for excisability. The absence of distinct characteristics, market evidence, and specific tariff entry led to the dismissal of the Revenue's claims. The Tribunal emphasized that mere utility in another process did not establish marketability, ultimately ruling in favor of the appellant and granting consequential relief.

This detailed analysis of the judgment showcases the arguments presented by both parties, the legal principles invoked, and the Tribunal's reasoning leading to the final decision in the case regarding the excisability of kettle residue in the context of central excise duty.