H.R. Syiem, Member

1. The factory told the Collector of Central Excise, Indore that the slurry resulted from their treatment of hydrochloric acid with lime in order to neutralise it. The slurry was a waste, an effluent, and was thrown away. A firm by the name of M/s. Jameco Agencies took the slurry for recovery of calcium chloride, but this forms a very small part of the waste thrown away by Gwalior Rayon Factory. The slurry waste was not sold to Jameco Agencies.

2. No contradiction was made to the above story in the Collector's order, which records that the assessee wrote to the Superintendent of Central Excise, Nagda in March 1979 that neutralization of hydrochloric acid was a regular feature. The Collector ended his order (No. 2/80 T.I. 14G dated 28-7-1981) by saying that neutralized hydrochloric acid in the form of slurry constituted goods on which duty should have been paid when supplied to a customer.

3. The learned counsel for the factory told us at the Bench that the goods was of no use to them. They had to treat the hydrochloric acid because it was a substance that cannot be thrown away without danger to persons and property. When they treated it, it was not to obtain a