Marketability test for aluminium dross and skimming defeated excise duty claim despite tariff classification and sales evidence.

Aluminium dross and skimming arising during manufacture of aluminium products were held not to be excisable goods because tariff classification alone did not establish excisability; marketability as goods had to be shown. The Tribunal found that the earlier Supreme Court ruling remained applicable, as no reliable evidence of a recognised market, commercial listings, market quotations, or established trade was produced, and mere regular sale or a quoted price was insufficient. Chapter Note 3 to Chapter 26 was also found inapplicable because no evidence showed that the residue was used in industry for metal extraction or for manufacture of metal-based chemical compounds. The duty demand was unsustainable and the appeal failed.

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Issues: Whether aluminium dross and skimming arising during manufacture of aluminium products were excisable goods liable to Central Excise duty, and whether their classification under heading 2620 and the evidence of sale established marketability and coverage under Chapter Note 3 to Chapter 26.

Analysis: The dispute turned on marketability, because classification under heading 2620 by itself did not establish excisability unless the product answered the description of goods. The Tribunal held that the earlier Supreme Court ruling on aluminium dross and skimming remained applicable, since such dross and skimming were neither goods nor marketable commodities on the facts shown. Mere regular sale or a quoted price did not prove the existence of a recognised market for the product, and no supporting material such as commercial listings, market quotations, or evidence of established trade was produced. The Tribunal also held that Chapter Note 3 to Chapter 26 applies only where ash or residue is used in industry for extraction of metal or as a basis for manufacture of chemical compounds of metals, and no evidence of such end use was shown.

Conclusion: Aluminium dross and skimming were held not to be excisable goods for the disputed period, and the Revenue's challenge to the appellate order failed.

Final Conclusion: The demand of duty could not be sustained, and the appeal was rejected.

Ratio Decidendi: A product is not liable to central excise merely because it is specified in the tariff; it must also be shown to be marketable goods, and a mere sale of waste or by-product does not by itself establish marketability or excisability.

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