Tribunal rules Zinc Dross and Zinc Ash not subject to excise duty. Precedents cited. Appeal allowed.

The Tribunal ruled in favor of the Appellants, holding that Zinc Dross and Zinc Ash generated during the galvanisation process are not chargeable to excise duty. Citing precedents such as Hindalco Industries Limited Vs UoI and Bajaj Auto Ltd Vs CCE Aurangabad, the Tribunal determined that these by-products do not attract duty as they do not arise from the manufacturing process. Consequently, the demand for recovery of short-paid duty amounting to &8377;36,48,510/- for the period March 2005 to March 2008 was set aside, and the appeal was allowed with any necessary relief under the law.

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Issues:
- Chargeability of excise duty on Zinc Dross and Zinc Ash generated during galvanisation process.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the CCE (Appeals), Mumbai, regarding the chargeability of excise duty on Zinc Dross and Zinc Ash generated during the galvanisation process of manufacturing excisable goods falling under Chapter 73 of the Central Excise Tariff Act, 1985. The Appellants had availed CENVAT Credit on duty paid for Zinc Dross used in the manufacturing process. However, they cleared the by-products, including Zinc Dross and Zinc Ash, without paying Central Excise duty, leading to demand notices for recovery of short-paid duty amounting to &8377;36,48,510/- for the period March 2005 to March 2008. The demand was confirmed with interest and penalty, which was appealed by the Appellants.

The Appellant's Advocate argued that the issue of duty chargeability on Zinc Dross and Zinc Ash had been settled by previous judgments, citing cases such as Hindalco Industries Limited Vs UoI, Bajaj Auto Ltd Vs CCE Aurangabad, and UoI Vs DSCL Sugar Ltd. These judgments established that waste and residue emerging during the manufacturing process, such as Zinc Dross and Zinc Ash, are not subject to duty as they do not result from the process of manufacture.

The Revenue's representative reiterated the findings of the learned Commissioner (Appeals) regarding the duty chargeability issue. After considering the arguments from both sides, the Tribunal found that the issue was no longer res integra and was settled by previous judgments, including those of the Hon'ble Supreme Court and the Hon'ble Bombay High Court. The Tribunal referenced the judgments in Bajaj Auto Ltd, DSCL Sugar Ltd, and Hindalco Industries Ltd, which concluded that by-products like Dross and skimming of Aluminum generated during manufacturing processes are not leviable to excise duty.

Based on the precedents and legal principles established in the mentioned judgments, the Tribunal concluded that the Zinc Dross and Zinc Ash generated during the galvanisation process should not be subjected to duty. Therefore, the impugned Order-in-Appeal was set aside, and the appeal was allowed with any consequential relief as per law.

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