Judgment:
1. The respondents in this case manufacture Di Calcium phosphate Animal Feed Grade. During the process chemical waste, namely, dust, sludge and sinews came into existence. The respondents were clearing such waste products on payment of duty during the period February, 1984 to May. In June, 1984 they filed 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 1-3-1975. The Collector (Appeals) relying upon the following judgments held that such waste was not manufactured products and did not attract duty.Aluminium Industries Ltd. v. Collector of Central Excise, --1987 (31) E.L.T. 748 (Tri.); (2) Final Order No. 628 to 629/89-C dated 25-10-1989 passed by CEGAT in the case of Cynamide India Ltd.;Union Carbide India Ltd. v. Union of India and Ors. -1986 (24) E.L.T. 169 (SC);Hindustan Lever Ltd. v. Collector of Central Excise, Calcutta - 1985 (22) E.L.T. 232 (Tri);Modi Rubber Ltd and Ors. v. Union of India and Ors. -1987 (29) E.L.T. 502 (Delhi) 2. Shri J.M. Sharma, Id. 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. v. Collector of Central Excise, Delhi - 1987 (31) E.L.T. 452 (Tribunal) and also on judgment of the Apex court in the case of Khandelwal Metals. Reference was also invited to the judgment of the Tribunal in the case of Collector of Central Excise, Calcutta v. Incheck Tyres Limited - 1987 (30) E.L.T. 313 (Tribunal).
3. The respondents were not present but requested for disposal on merits. In their written submission they have cited a number of judgments. 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) E.L.T. 268 (SC) and Vikas Industrial Gases Ltd. v. Commissioner of Central Excise, Allahabad - 1996 (84) E.L.T. 32 (Tribunal).
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 judgment 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 Acetylene gas was not an excisable commodity.
6. The ratio of these two judgments 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 v. Bharat Petroleum Corporation - 1995 (77) E.L.T. 790 observed that where a subsidiary product was turned out regularly and continuously in the course of a manufacturing business and is also sold regularily from time to time, an intention can be attributed to the manufacturer to manufacture and sell not merely the main item manufactured but also the subsidiary product. In this case the impugned goods were acid sludge which arose continuously in a refinery where crude oil was refined using sulpuric acid. In this case the Hon'ble Apex Court found that the acid sludge was a commercial commodity with a market and was sold under a contract to a particular buyer.
8. In the present case we find that during the short period of three months the waste products in this case was cleared on no less than 51 occasions. The frequency and regular intervals at which such sludge and dust was cleared does (sic) that these products were not mere waste but were subsidiary products turned out regularly and continuously during the course of manufacture and were also sold regularly. The regularity and frequency also suggest that this sludge and dust were known to the market as distinct entities and were purchased by different buyers.
Therefore, the Collector was clearly wrong in holding that the impugned goods were not goods with a new name, character or use.
9. In the result, the appeal succeeds. The orders of the Collector are set aside and the order of the Assistant Collector is restored.