1987 (6) TMI 153 - AT - Central Excise

Summary

Issues: Classification of Carbide Sludge under Central Excise Tariff Item 68.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the Collector of Central Excise (Appeals) Madras had previously ruled that Carbide Sludge, arising during the manufacturing process, was waste and not goods, hence not classifiable under Tariff item 68 of the Central Excise Tariff. The Collector of Central Excise, Guntur, appealed this decision before the Tribunal. The respondents argued that Carbide Sludge should be classified as goods under Tariff Item 68 based on its marketability and use as lime, as per a letter submitted by them. However, the Bench highlighted a Delhi High Court decision stating that waste and scrap, even if marketable, cannot solely determine the event of manufacture. The respondents' letter described Carbide Sludge as waste material discharged during the manufacturing process of acetylene gas, with only a small portion sold as lime, while the majority remained as waste due to lack of market demand. The Tribunal noted that the Collector (Appeals) had not refuted the appellants' claim that Carbide Sludge was waste and not a by-product. The Tribunal referenced a Bombay High Court judgment and concluded that Carbide Sludge appeared to be waste generated during the acetylene gas manufacturing process, lacking significant marketability despite occasional sales. Therefore, the Tribunal upheld the Collector (Appeals)' decision and dismissed the appeal, allowing Revenue to provide credible evidence in the future to establish Carbide Sludge as goods under the law's criteria.