Zinc dross from galvanization is not excisable unless the process amounts to manufacture, despite tariff listing and marketability.

Zinc dross arising during galvanization was held not to be manufactured goods and therefore not excisable, even though it was separately sold and specifically mentioned in the tariff. The Tribunal applied its earlier coordinate bench view and the authorities relied on there, holding that amendments to the tariff and to the definition of excisable goods did not change the legal position. Marketability alone was insufficient where the underlying galvanization process did not amount to manufacture. On that basis, the duty demand was unsustainable and the lower orders were set aside.

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Issues: Whether zinc dross arising during galvanization is a manufactured product and excisable goods liable to central excise duty despite the specific tariff entry and the amended definition of excisable goods.

Analysis: The dispute turned on whether the process by which zinc dross arose during galvanization amounted to manufacture and whether the product, being separately sold as slabs/ingots, became excisable merely because it was specifically mentioned in the tariff and could be bought and sold. The Tribunal followed its earlier coordinate bench view and the decisions relied upon therein, holding that the amendments to the tariff and to the definition of excisable goods did not alter the position that zinc dross arising as a by-product in galvanization is not a manufactured product. Marketability alone was held insufficient where the activity did not amount to manufacture.

Conclusion: Zinc dross cleared by the assessee is not excisable and is not liable to central excise duty.

Final Conclusion: The duty demand was unsustainable and the orders of the lower authorities were set aside, resulting in allowance of the appeals.

Ratio Decidendi: A by-product arising during galvanization does not become excisable merely because it is specifically listed in the tariff or is marketable unless the process results in manufacture of goods.

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