1988 (8) TMI 197 - AT - Central Excise

Summary

Issues Involved:
The liability of duty on waste pickle liquor arising during the manufacturing process and the applicability of duty on such waste products.

Summary:
The case involved M/s. Indian Tube Co. Ltd., who subjected steel pipes and tubes to the process of pickling using diluted sulphuric acid. A show cause notice was issued to them regarding the removal of waste pickle liquor and imposition of duty and penalty. The Collector of Central Excise held the waste pickle liquor as excisable under Item 68 CET and demanded duty for a specific period. The appeal challenged this order.

In the appeal, the appellant contended that waste arising during the manufacturing process should not be liable for duty, citing various precedents where similar waste products were held non-dutiable. The department argued that the waste pickle liquor was dutiable as it arose during manufacturing, had a distinct name, and was marketable to another concern for use in their paint manufacturing business.

The Tribunal considered previous decisions and noted that the waste pickle liquor was a waste product after losing its efficacy in the pickling process, not a valuable by-product. It was given away to another firm without charge, indicating lack of marketability. The Tribunal rejected the department's argument and held that the waste pickle liquor was not dutiable, overturning the lower authorities' orders.

In conclusion, the Tribunal found the lower authorities' orders incorrect, allowing the appeal and setting aside their decisions with any consequential relief.

This judgment clarifies the distinction between waste products and valuable by-products in the context of excisability, emphasizing the lack of marketability and utility in determining duty liability on such waste materials.