Per J. H. Joglekar :

The respondents in this case manufacture Di Calcium Phosphate Animal Feed Grade. During the process chemical waste, namely, dust, sludge and sinews come into existence. The respondents were clearing such waste products on payment of duty during the period February, 1984 to May, 1984. In June, 1984 they filed the refund claim on the ground that the goods were not excisable. The Assistant Collector rejected the refund claim holding that the goods were marketable and that they were having distinct characters and usage; thus, making them "goods" in terms of the Central Excise Law. He further held that the goods did not merit exemption under Notification No. 55/75 dated 1.3.75. The Collector (Appeals) relying upon the following judgements held that such waste was not manufactured products and did not attract duty.

(1) Aluminium Industries Ltd. Vs. Collector of Central Excise, 1987 (31) ELT 748 (T);

(2) Final Order No. 628 to 629/89-C dated 25.10.89 passed by CEGAT in the case of Cyhamid India Ltd.

(3) Union Carbide India Ltd Vs Union of India & Others, 1986 ELT 169 (SC);

(4) Hindustan Lever Ltd Vs Collector of Central Excise, Calcutta, 1985 (22) ELT 232 (T);

(5) Modi Rubber Ltd & Others Vs Union of India & Others, 1987 (29) ELT 502 (Delhi).

The Revenue has come up in appeal against this order.

2. Shri J.M. Sharma, Ld. JDR, claimed that the chemical waste generated by the respondents had a regular market and the frequency of sale was substantial. Since they were eminently useable, they qualify the term "goods" under the legislation. Reliance was placed on the judgment of the Tribunal in the case of Super Tyres (P) Ltd Vs Collector of Central Excise, Delhi, 1985 ECR 857 (Cegat) and also on the judgment of the Apex Court in the case of Khandelwal Metals. Reference was also invited to the judgement of the Tribunal in the case of Collector of Central Excise, Calcutta Vs. Incheck Tyres Limited, 1987 (30) ELT 313 (T).

3. The respondents were not present but requested for disposal on merits. In their written submissions they have cited a number of judgements. The claim was made that even if the goods had any market they could not be termed as "goods" under the scheme of Central Excise Law. The principal citation was of the Apex Court in the Case of Indian Aluminium Company, 1995 (77) 268 (SC) and Vikar Industrial Gases Ltd Vs. Commissioner of the Central Excise, Allahabad, 1996 (84) ELT 32 (T).

4. We have carefully considered the submissions made by both the sides.

5. The issue whether waste products are excisable goods or not has been discussed in number of judgments. In the cited judgment of the Apex Court in the case of Indian Aluminium Co. Ltd. it was held that everything which was sold was not necessarily marketable commodity. It was observed that even rubbish could be sold but that did not make it a marketable commodity. It was held that refuge arising in the case of manufacture could not be called waste and scrap and, therefore, was not goods. This judgement of the Apex Court was followed by the Tribunal in the cited case of Vikas Industrial Gases Ltd. in which it was held that carbide sludge being a waste product arising during the course of manufacture of actilian gas was not an excisable commodity.

6. The ratio of these two judgements is that by - products and refuge which are not intended to be manufactured are not goods and, therefore, do not attract duty.

7. However, whether a particular by product is an entirely un-intended manufacture or whether it is an anticipated by product would have to be decided in each case. The Apex Court in their judgment in the case of Commissioner of Sales Tax, Bombay Vs Bharat Petroleum Corporation, 1995 (77) ELT 790 observed that where a subsidiary product was turned out regularly and continuously in the course of a manufacturing business and is also sold regularly from time to time, an intention can be attributed to the manufacturer to manufacture and sell not merely the main item