2018 (7) TMI 1357 - AT - Central Excise

Excisability/Marketability - 6939.980 M.T. of Solid Waste/ Bag Filter Dust - assessee contended that the Bag Filter Dust is nothing but a waste collected through Pollution Control Equipments installed at their factory and are sold as waste - Board Circular No. 904/24/2009-CX dated 28.10.2009 - Held that - Hon ble Supreme Court in the case of Union of India Vs. DSCL Sugar Limited 2015 (10) TMI 566 - SUPREME COURT after considering the amendment of Section 2(d) had held that Bagasse is not excisable goods as there being no manufacturing process and dismissed the appeal filed by the Revenue. The goods are not excisable - appeal dismissed - decided against Revenue.

Summary

Issues:
Central Excise duty on Solid Waste/Bag Filter Dust clearance without payment.

Analysis:
The case involved the manufacture of Sponge Iron and the clearance of Solid Waste/Bag Filter Dust without paying Central Excise duty. The Adjudicating authority confirmed the duty demand and imposed a penalty, which was set aside by the Commissioner (Appeals) based on the marketability of the waste. The Revenue appealed this decision, and the assessee filed a cross objection.

The main contention was whether Bag Filter Dust, considered waste by the assessee, was marketable and thus subject to Central Excise duty. The Adjudicating authority argued that since the waste was sold, it had marketability. However, the Commissioner (Appeals) referred to the decision of the Hon'ble Bombay High Court in a similar case, emphasizing the commercial identity of waste for it to be considered dutiable goods.

The Revenue, in its appeal, highlighted an amendment to Section 2(d) of the Central Excise Act, 1944, deeming articles capable of being sold as marketable goods. The Revenue argued that the waste, even if sold at a nominal value, should be considered marketable. However, the Tribunal noted that the Bombay High Court's decision in a related case considered this amendment and ruled in favor of the assessee. Additionally, the Tribunal cited a Supreme Court case where Bagasse was deemed non-excisable due to the absence of a manufacturing process.

Ultimately, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal and disposing of the cross objection. The Tribunal found no reason to interfere, considering the precedents and the interpretation of marketability in relation to waste products.

This judgment clarifies the applicability of Central Excise duty on waste products based on their marketability, referencing relevant case laws and statutory amendments. It highlights the importance of commercial identity and the interpretation of marketable goods under the Central Excise Act, ultimately favoring the assessee in this case.