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TMI Blog1995 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... entrated Sulphuric Acid after use in the plant becomes diluted and comes out of the plant and is then known as spent sulphuric acid with a concentration of 60% to 65%. The Department found that the appellants apart from disposing the spent sulphuric acid as waste by allowing it to mix with sand and mud, were also selling it to industrial consumers. The acid, that is sold, is stored in carbuoy and steel tanks and is sold periodically on the basis of contracts without payment of excise duty and without following the prescribed procedure. By a show cause notice issued on 27-8-1988 duty of Rs. 15,947.07 was demanded on the spent sulphuric acid removed without payment of duty for the period from 1-3-1986 to 27-11-1986. It was alleged that duty b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket. The Tribunal decision reported in 1985 (22) E.L.T. 232 to say that spent earth arising as waste material from activated earth during soap manufacture is only waste material and mere fact that it is sold, is not determinative of its assessability. The appellants have further relied upon an order-in-appeal, dated 27-6-1990 of the Collector (Appeals) wherein the Collector (Appeals) had held that spent sulphuric acid is a waste are by-product and has to be treated as waste covered by [Rule 57D(1)]. The goods are also eligible for exemption under Notification No. 170/65. The appellants further contended that the Department cannot invoke the longer period under Section 11A, Central Excises and Salt Act, 1944 for demanding duty because the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y demanded on spent sulphuric acid under Rule 57F(4)(a) of Central Excise Rules is valid and if so can the Department invoke the longer period under Rule 57-I read with Section 11A of Central Excises and Salt Act, 1944. Rule 57F(4)(a) says Any waste, arising from the processing of inputs, in respect of which credit has been taken may be removed on payment of duty as if such waste is manufactured in the factory . Appellants herein use the duty paid sulphuric acid in the manufacture of chlorine. The concentrated sulphuric acid after such use becomes diluted in the process of dehydration of chlorine and emerges with a concentration ranging between 60% to 65% which is called spent sulphuric acid. The appellants sell the material as waste in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not even waste or scrap. They are not goods at all as understood in commercial parlance." The Supreme Court also held that dross and skimmings as refuse material is quite different from waste and scrap which is prime material in its own right. Viewed in the light of the above Supreme Court pronouncement, in the present case Spent Sulphuric acid finds a regular market with industrial users to whom the appellants sell it against contracts entered into for the purpose. In their reply dated 31-8-1988 to the show cause notice, the appellants have also agreed in principle to pay the duty on being pointed out by the Department. Their plea that they were under the bona fide belief that the spent sulphuric acid is not dutiable is not attri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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