TMI Blog2021 (11) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... reatment Plant forms sludge and is removed on a daily basis to a dump yard from where it gets dried and is thereafter sold to fertilizer manufacturers. The appellant has to comply with the pollution control requirements and therefore maintain the Effluent Treatment Plant and remove the waste as per the effluent norms. A manufacturer would be happy when there is less waste or no waste at all since the burden of maintaining the effluent treatment plant and the transportation of the sludge etc. can be minimized. No manufacturer would consciously manufacture waste. For these reasons, it cannot be said that the waste / sludge is an exempted goods manufactured by the appellant. The said issue stands considered by the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay an amount equal to 10% / 5% of the total value of the exempted sludge cleared by them for the period 01.02.2007 to 30.09.2011 along with interest. Show cause notice dated 22.02.2012 was issued to the appellant proposing to demand the above amount along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and penalties against which the appellants preferred appeal before the Commissioner (Appeals). The demand for the period prior to 10.05.2008 was set aside by the Commissioner (Appeals) and the demand, interest and penalty for the subsequent period was upheld. Aggrieved by such order, the appellants are now before the Tribunal. 2. Ld. Counsel Shri M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act, 1944 while giving meaning of excisable goods . The said Explanation reads as under : excisable goods means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt ; Explanation . for the purposes of this clause, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. The appellants having not manufactured sludge , but merely because it was sold, it cannot be said that it is an exempted goods manufactured by the appellants. The issue has been considered and decided in the case of ITC Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that arises is drained into the Effluent Treatment Plant. Thus, waste removed from the Effluent Treatment Plant forms sludge and is removed on a daily basis to a dump yard from where it gets dried and is thereafter sold to fertilizer manufacturers. The appellant has to comply with the pollution control requirements and therefore maintain the Effluent Treatment Plant and remove the waste as per the effluent norms. A manufacturer would be happy when there is less waste or no waste at all since the burden of maintaining the effluent treatment plant and the transportation of the sludge etc. can be minimized. No manufacturer would consciously manufacture waste. For these reasons, it cannot be said that the waste / sludge is an exempted goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. 6 . Sludge is being bought and sold. He submits that the very fact that sludge is exempted from excise duty shows that it is covered by Central Excise Tariff. And therefore credit proportional to the value of sludge cleared should be reversed. His argument is that in a manufacturing process if two products are emerging and if both are sold for a consideration there is no reason to consider one as excisable and other as not excisable. 7 . We have considered the submissions of both sides. We find merit in both the arguments raised by appellant. Sludge emerging from effluent treatment plant in the nature of wast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of manufacture. The same may be excisable and that is the reason the same was granted exemption vide exemption notification (supra). But, the issue in the present case is not whether sludge is excisable but whether the appellant is liable to reverse an amount as required under Rule 6(3). We note that an identical issue came up before the tribunal in the case of M/s. Magnum (supra), which dealt with the sludge formation in Effluent Treatment Plant in respect of the appellants paper manufacturing factory. The Tribunal held that there is no requirement for such reversal. Similar view has been held by the Tribunal in the case of M/s. ITC Ltd (supra), wherein, the Tribunal held that the sludge emerging from Effluent Treatment Plant is in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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