1987 (3) TMI 212 - AT - Central Excise

Summary

Issues:
1. Whether fly ash produced during the burning of powdered coal is liable to duty under Tariff Item 68.

Analysis:
The case involved a dispute regarding the excisability of fly ash produced during the burning of pulverised coal. The main contention raised by the Advocate for the Andhra Pradesh State Electricity Board was that fly ash should not be considered excisable as it is a waste product resulting from the combustion of coal. The Advocate argued that fly ash, similar to bottom ash, is a residual waste and should not be subjected to excise duty. The Advocate relied on a judgment of the Bombay High Court to support this argument, emphasizing that waste products like fly ash should not be considered excisable goods.

On the other hand, the learned SDR argued that fly ash is a distinct commodity from coal with its own characteristics and uses. She pointed out that fly ash meets the standards set by the Indian Standard Institution and is used for various purposes, including the manufacture of Pozzolana Cement. The SDR highlighted that the Assessee had sold fly ash to consumer industries, indicating its marketability. The SDR also referenced a Supreme Court judgment to support the classification of fly ash as excisable goods.

After considering the arguments from both sides, the Tribunal agreed with the views presented by the learned SDR. The Tribunal referenced the Supreme Court judgment regarding the classification of waste and scrap as excisable goods, emphasizing that waste products can be by-products of the manufacturing process and still subject to excise duty. The Tribunal concluded that fly ash, being a marketable commodity with commercial value, falls under Tariff Item 68 of the Central Excise Tariff and is liable to excise duty.

In the final decision, the Tribunal ruled in favor of the Department in Appeal No. 1, concluding that fly ash is excisable and subject to duty under Tariff Item 68. Appeal No. 2 of the Assessee was deemed unsuccessful based on the findings regarding the excisability of fly ash.