Per Jyoti Balasundaram:

In this case duty demand of Rs. 1,68,12,710.84 has been confirmed on Diatomaceous Earth produced by the applicant during the period April 94 to December, 94 and penalty equivalent to duty has been imposed under Sec. 11AC and Rule 173Q of the Central Excise Rules. The applicant is the manufacturer of additives for automotive and industrial lubricants for treatment of fuel. During the manufacture of additives, filtration process is carried out and for filtration diatomaceous earth/silica/sand is used. Diatomaceous earth/silica/sand absorbs the impurities and coarse particles from the base oil and after the said process there emerges spent diatomaceous earth comprising of impurities and coarse particles which material is the subject matter of the present case and the said material emerges in brown coloured lump in siliceous form, which is termed as Waste Filter Cake. The contention of the department is that this product falls under Chapter 38.23 and since it is also marketable and has commercial value as admittedly it has been cleared by the applicant to job workers, the duty demand has been rightly confirmed.

2. We find on a careful consideration of the sub