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TMI Blog2014 (4) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... process of manufacture of paper, sludge is formed in Effluent Treatment Plant (ETP) where water of the plant is purified for re-use. Such sludge is being sold by the appellants on different intervals. During the process of manufacture of paper, pulper waste and refuse also emerges which the appellant is selling at regular intervals. 2. Revenue entertained a view that such sludge and pulper waste and refuse is a excisable commodity and was required to be cleared on payment of duty. Accordingly, proceedings were initiated against the appellants by issuance of three Show Cause Notices raising demands and proposing imposition of penalties, which Notices stand adjudicated against them and such orders stand upheld by the Commissioner (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it is clarified that with this amendment in Section 2(d), the bagasse aluminium, zinc dross and other such products termed as waste, residue or refuse which arise during the course of manufacture and are capable of being sold for consideration would be excisable goods and chargeable to payment of excise duty. 5. Ld. Counsel for the appellants has strongly contended that in as much as the sludge and the pulper waste and refuse is nothing but the refuse which comes into existence during the course of manufacture of paper, it cannot be said that they have manufactured the said sludge and pulper waste. Merely because the appellants are disposing of this sludge and the pulper waste against consideration would not make the said products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by both the sides and have carefully gone through the impugned orders. The issues involved in the present cases as to whether the sludge obtained in the effluent treatment plant situated in the appellants factory has to be held as excisable goods for discharging of excise duty or alternatively, if excisable, the same would be exempted in terms of Notification No.76/86-CE, dated 10.02.1986. The other issue required to be decided is as to whether the pulper waste, which emerges in the pulp plant of the appellant can be said to be a manufactured goods and consequently excisable. 9. The lower authorities have strongly relied upon the amendment made in Section 2(d) of the Central Excise Act on 10.05.2008 vide which the explanation was intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sludge and paper waste is not involved in the present cases. As such, the emergence of sludge and pulper waste during the course of manufacture of paper or paper board cannot be held to the result of any manufacturing activity. 10. The lower authorities have relied upon the addition of explanation to Section 2(d) of the Central Excise Act, 1944. However, if a product is not a result of a manufacture, such explanation relatable to the excisability of the goods, based upon the marketability of the same, cannot be used for holding a product to be the result of manufacture in as much as the same not only relates to the marketability of the product but also the 'criteria of manufacture' is still required to be satisfied. While dealing with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Union of India Vs. Indian Aluminium Co. Ltd. reported in 1995 (77) E.L.T. 268 (SC) held that merely because aluminium dross and skimmings are sold and some amount may be recovered from the same will not make them marketable commodity. However, in terms of the addition of explanation to Section 2(d), the marketability expect may be satisfied but the Court further observed as under:- It is also not possible to accept the contention of the appellant that aluminium dross and skimmings are goods are marketable commodity, which can be subjected to the levy of excise. Undoubtedly, aluminium dross and skimmings do arise during the process of manufacture but these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Balrampur Chini Mills Ltd. Vs. Union of India reported in 2013 (38) STT 635/30 Taxmamn.com 175 Allahabad. By referring to explanation added to Section 2 (d) of Central Excise Act, 1944, the Court observed that it only refers to the goods which is capable of being bought and sold which shall be deemed to be marketable. Earlier also, beggass was being bought and sold for a consideration and even after the amendment in 2008, it is being bought and sold for a consideration. Hence, it was marketable earlier also and no difference has been made about the marketability of beggass on account of addition of explanation to Section 2 (d) of Central Excise Act, 1944, in as much as it does not ceases to be waste and it does not become a manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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