2017 (12) TMI 1206 - AT - Central Excise

Whether the goods namely Acid Slurry (organic surface active agent) falling under Chapter heading 3402.90 of Central Excise Tariff is eligible for exemption N/N. 88/88 dated 01.03.1988 which exempts synthetic detergents vide Sr. No.26 of the table attached to the notification? Held that - As per the definition of synthetic detergent it is used for washing clothes etc. the Acid Slurry cannot be used for washing clothes or any other substance. Acid Slurry is one of the inputs used in the manufacture of synthetic detergent. In the trade parlance also, Acid Slurry is not known as synthetic detergent. The chemical laboratory report of chemical examiner though show that the Acid Slurry found mentioned in the literature as synthetic detergent but that itself is not sufficient to decide that the synthetic detergent mentioned in the notification satisfies synthetic detergent its primary use for washing of clothes etc. All synthetic detergent which are sold in the market is a formulation of Acid Slurry and various inputs such as sodium carbonate, dolomite powder, perfume and colour etc. Therefore there is a difference between Acid Slurry and synthetic detergent. As per the plain reading of Sr. no. 28 as reproduced above, it can be seen that the goods used captively is only exempted when it is used within the same factory of the manufacture - it cannot be said that the amendment is of clarificatory nature. Appeal dismissed - decided against appellant.

Summary

Issues involved:
1. Eligibility of Acid Slurry for exemption under notification no. 88/88 dated 01.03.1988 as a synthetic detergent.
2. Dutiability of Spent Sulphuric Acid emerging during the manufacture of Acid Slurry.

Analysis:

Issue 1: Eligibility for exemption under notification no. 88/88:
The appellant claimed that Acid Slurry falls under Chapter heading 3402.90 and is eligible for exemption as a synthetic detergent under notification no. 88/88. The appellant argued that Acid Slurry is an organic surface active agent and is considered a synthetic detergent based on a test report by a chemical examiner. The appellant also contended that even if Acid Slurry is used for manufacturing synthetic detergents, it should be exempted under Sr. No. 28 of the notification. However, the respondent argued that Acid Slurry is not a detergent but an input for detergent manufacturing, hence not eligible for exemption. The tribunal noted that Acid Slurry, although having cleaning properties, is not sold as a synthetic detergent in the consumer market. The tribunal differentiated between Acid Slurry and synthetic detergent based on primary usage for washing clothes. The tribunal upheld that Acid Slurry does not qualify as a synthetic detergent under the notification.

Issue 2: Dutiability of Spent Sulphuric Acid:
Regarding the dutiability of Spent Sulphuric Acid emerging during Acid Slurry manufacturing, the tribunal referred to a previous decision stating that Spent acid, as a by-product, is excisable goods and liable for duty. The tribunal held that Spent Sulphuric Acid is a separate entity from the inputs used in Acid Slurry manufacture, making it dutiable.

In conclusion, the tribunal upheld the impugned order, dismissing the appeal on 30/11/2017.

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