ORDER

Per Jyoti Balasundaram : The above appeal arise out of the order of the Collector (Appeals, Central Excise, Allahabad confirming the orders of the Assistant Collector by which he had classified Carbide Sludge arising in the course of manufacture of acetylene gas by the appellants under Chapter Sub-heading 2849.9Q of the CETA 1985 and confirming demands of duty of Rs. 18.216/- and Rs. 3,520/-. However the lower appellate authority set aside the penalties imposed by the adjudicating authority.

2. The appellants requested for a decision on merits; hence he heard Shri J .M. Sharma, learned DR and perused the records.

3. The appellant is a public limited company engaged in the production of industrial gases such as Oxygen, Nitrogen and dissolved Acetylene. It has its registered office and factory at Vikas Nagar, Renukoot. For production of d is solved acetylene gas, the raw material is calcium carbide which the appellant purchases from the manufacturers. The process of production of dissolved acetylene gas us under:

"Calcium carbide lumps are exposed to water. When it is exposed to water, acetylene gas is released from calcium carbide. This gas is filtered and dried and thereafter, fi