2004 (3) TMI 304 - AT - Central Excise

Summary

Issues: Liability of respondents to pay 8% of the price of spent sulphuric acid under Chapter X.

In this case, the main issue before the Appellate Tribunal CESTAT, NEW DELHI was the liability of the respondents to pay 8% of the price of spent sulphuric acid cleared by them under Chapter X. The Revenue contended that as spent sulphuric acid was a final product, the respondents were liable to pay the 8% price under Rule 57CC. On the other hand, the respondents argued that spent sulphuric acid was a by-product and not the main product, thus Rule 57CC did not apply to their case.

The Tribunal analyzed the facts and found that the respondents were engaged in the manufacture of acid slurry, with sulphuric acid being one of the inputs. The spent sulphuric acid was a residue obtained as leftover from the sulphuric acid and could not be considered the main product of the respondents. The Tribunal referred to previous cases such as Auerola Chemicals Ltd. v. CCE, Indore and Hindustan Zinc Ltd. v. CCE, Jaipur, where similar demands under Rule 57CC were quashed as spent sulphuric acid was not deemed the final product. Consequently, the Commissioner (Appeals) rightly reversed the order-in-original and set aside the demand against the respondents.

Therefore, the Appellate Tribunal CESTAT, NEW DELHI dismissed the appeal of the Revenue, holding that the respondents were not liable to pay 8% of the price of spent sulphuric acid under Chapter X as it was not the main product but a by-product in their manufacturing process.