POLYMERS AND TRANSMISSION Vs. COLLR. OF C. EX.

JUDGEMENT

(1.) THIS appeal against the order of the Additional Collector of Customs and Central Excise, Vadodara, dated 6 -3 -1991 raises the question of excisability of 'waste solvent'. The question of limitation has also been raised. By the impugned order the appellants were called upon to pay excise duty amounting to Rs. 21,054.26 on the item. A certain amount of 'waste solvent' was also ordered to be confiscated with option to redeem the said goods on payment of Rs. 2,000/ - as redemption fine. Penalty of Rs. 7,500 was also imposed on the appellants.

(2.) APPELLANTS are engaged in the manufacture of insulating varnish falling under Chapter sub -heading 3208.40 of the CETA, 1985. According to the appellants a certain amount of 'waste solvent' is generated as a by -product in the course of the manufacture of insulating varnish. According to them, this does not amount to 'manufacture' of the said product nor is the said waste solvent, being a waste by -product, an excisable item. Further, the said waste solvent, being not an excisable commodity, did not require any prior permission for its disposal nor did its generation require filing of any returns, keeping of production records, etc. The Department's case is that the waste solvent was nothing but methanol falling under sub -heading 2905.10. Being an excisable item, production and clearance thereof without complying with the provisions of the Central Excise Act and the Rules would make the appellants liable under Rule 9(2) of the Central Excise Rules as well as for confiscation of the said goods under Rule 173Q(1) and Rule 226 of the Central Excise Rules as well as for penalty under Rule 173Q.

(3.) WE have heard Shri K.K. Anand, ld. Counsel appearing for the appellants and Shri H.K. Jain, ld. DR appearing for the Respondent Commissioner.