Central Excise - Classification and dutiability of lime sludge in paper mills - Regarding - Central Excise - 120/40/86-CX.3

Central Excise - Classification and dutiability of lime sludge in paper mills - Regarding F. No. 120/40/86-CX.3 Dated 5-1-1987 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification and dutiability of lime sludge in paper mills - Regarding A doubt has been raised as to whether lime sludge, arising in paper mills in the course of recovery of caustic soda from black liquor in soda recovery plant with treatment of lime, and during the manufacture of bleach liquor by reaction of lime with chlorine, should be considered as excisable under Schedule to the Central Excise Tariff Act, 1985. 2. In so far as the question of excisability of such lime sludge is concerned, the matter has been examined by the Board in the light of the Supreme Court Judgment in the case of Union Carbide India Limited v. Union of India and Others in Civil Appeal No. 1103 of 1972, decided on 4-4-1986. As per this judgment, the article manufactured must be capable of sale to a consumer in order to attract excise duty. The 'goods' for the purposes of Central Excises and Salt Act, 1944 should mean an article which must be something which can ordinarily come to the market to be brought and sold. The lime sludge which arises in paper mills in the course of recovery of caustic soda from black liquor in the soda recovery plant with treatment of lime and during the manufacture of bleach liquor by reaction of lime with chlorine is not an article which ordinarily comes to the market to be brought and sold. Such lime sludge is reported to be drained out and deposited inside the factory and thereafter the same is thrown out of the factory premises because of lack of space. Even if there is any stray case where such lime sludge is despatched to an outside buyer to avoid congestion of factory space, such stray instance will not establish that such lime sludge has got a market. 3. Accordingly, the Board is of the view that lime sludge which arises in paper mills in the course of recovery of caustic soda from black liquor in the soda recovery plant with treatment of lime, and during the manufacture of bleach liquor by reaction of lime with chlorine may not appropriately come within the meaning of 'goods' for the purpose of charging excise duty considering that such sludge is drained out and deposited inside the factory or thrown out of the factory premises to avoid congestion of factory space. 4. All pending assessments should be decided on the above basis.