Central Excise - Chapter 25 - Clarification regarding excisability of Molten Sulphur used in the continuous process of manufacture of Sulphuric Acid - Central Excise - 18/88-CX.3

Central Excise - Chapter 25 - Clarification regarding excisability of Molten Sulphur used in the continuous process of manufacture of Sulphuric Acid Circular No. 18/88-CX.3 Dated 30-8-1988 [From F.No. 104/2/88-CX.3 ] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Chapter 25 - Clarification regarding excisability of Molten Sulphur used in the continuous process of manufacture of Sulphuric Acid Certain doubts had been raised as to whether Molten Sulphur obtained from duty-paid sulphur should be treated as chargeable to excise duty or not when such molten sulphur is used within the factory of production in the process of manufacture of sulphuric acid. It has been stated that, to manufacture Sulphuric Acid, sulphur powder is molten and then sprayed in a burner to get sulphur dioxide gas. This gas is then converted into sulphur trioxide with the help of Vanadium Pentoxide Catalyst in a converter. Sulphur Trioxide is then dissolved in water to get sulphuric acid. The entire process of manufacture is stated to be exothermic in nature and consequently high temperatures are generated in the process. It is stated that, during the process, sulphur under conversion passes through different stages, such as molten sulphur, sulphur dioxide, sulphur trioxide etc. and in view of the very high temperatures (upto 1,000°C), they are handled/processed in closed and properly insulated compartments/pipelines. 2. The matter has been examined. The Board observes that it had earlier been clarified vide Board's telex F. No. 118/26/86-CX.3, dated 1-12-1986 that molten sulphur would be classifiable under sub-heading No. 2505.00 of the new CET. However, the position regarding the excisability of molten sulphur in each and every situation had not been clarified by the Board vide their above mentioned telex, dated 1-12-1986. 3. The matter has been got examined in consultation with Dy. Chief Chemist, CRCL, New Delhi. A Copy of Dy. Chief Chemist's opinion is enclosed. Dy. Chief Chemist is of the view that molten sulphur arising in the course of manufacture of sulphuric acid is absolutely an intermediate and transient form of sulphur. He is also of the view that such molten sulphur is not known anywhere in the world as a commercial/marketable form of sulphur. 4. The Board has accepted the above views of the Dy. Chief Chemist. It is accordingly clarified that molten sulphur arising from duty-paid sulphur at an intermediate stage in the course of manufacture of sulphuric acid cannot be treated as 'manufactured' excisable goods for the purpose of charging excise duty since such molten sulphur is absolutely an intermediate and transient form of sulphur. Moreover, on the basis of Supreme Court judgment in the case of Union Carbide, such molten sulphur would not come within the meaning of 'foods' for the purpose of charging excise duty since such molten sulphur is not marketable. 5. The trade interests may also be suitably advised. 6. All pending assessments may be finalised on the above basis. COPY C.R.C.L. u/o C. No. 75-Ex.C. 88, dated 18-7-1988 Department of Revenue u/o In the manufacture of sulphuric acid, sulphur is first melted and introduced into brick-lined combustion chamber in an atomised spray together with dry air. The temperature of the molten sulphur for this purpose is maintained between 135 and 155°C. If in a process necessity for converting it into sulphur dioxide in the first instance and the molten sulphur occurring at this stage is absolutely an intermediate and transient form of sulphur which is not known anywhere in the world as a commercial/marketable form of sulphur. The question of charging duty on this molten form of sulphur should not arise at all. Sd/- (R.S. VENKATARAMAN) Deputy Chief Chemist 18th July, 1988 .