1987 (2) TMI 243 - AT - Central Excise

Summary

Issues:
- Whether "Spent Wash" is chargeable to Central Excise duty under Item 68 of the Central Excise Tariff.

Detailed Analysis:

Issue 1: Chargeability of Central Excise Duty on "Spent Wash"
The appeal before the Appellate Tribunal CEGAT, New Delhi revolved around the question of whether "Spent Wash" is subject to Central Excise duty under Item 68 of the Central Excise Tariff. The Assistant Collector of Central Excise initially imposed duty on the Appellants for the "Spent Wash" cleared by them. However, the Collector of Central Excise (Appeals) set aside this order, emphasizing that the "Spent Wash" was a waste product generated during distillation, not intended for consumption or use by the Appellants. The Collector (Appeals) noted that the Appellants treated the "Spent Wash" biologically/chemically at a location 1.5 Kms away from the factory, making it suitable for irrigation purposes and eventually selling the dried sludge as manure. The Collector (Appeals) concluded that since the "Spent Wash" was processed far from the factory and was not intended for any other use, it did not qualify as excisable goods liable for duty, thereby allowing the appeal of the Appellants.

Issue 2: Application of Precedents and Legal Interpretations
During the proceedings, the Respondents cited judgments from the Bombay High Court and previous decisions of the Tribunal to support their argument that the "Spent Wash" should not be subject to Central Excise duty. The Respondents contended that the "Spent Wash" was a waste material arising from alcohol manufacturing, detrimental to crops and life, and not fit for marketing. Citing the Bombay High Court's ruling on Aluminium dross and skimmings as well as Tribunal decisions on scrap and spent earth, the Respondents argued that the "Spent Wash" did not constitute a manufactured product under the Central Excise Tariff. The Tribunal agreed with this interpretation, emphasizing that the "Spent Wash" was a waste material, not sold in the market, and the dried sludge was not a result of the manufacturing process at the factory. Relying on the precedents and legal principles, the Tribunal upheld the Collector (Appeals) order, ruling that no excise duty was chargeable on the "Spent Wash" obtained by the Respondents.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, after considering the arguments and legal precedents, upheld the decision of the Collector (Appeals) and dismissed the appeal filed by the Collector of Central Excise, Allahabad, determining that the "Spent Wash" was not liable for Central Excise duty under Item 68 of the Central Excise Tariff due to its nature as a waste product arising from the alcohol manufacturing process.