2018 (1) TMI 677 - AT - Central Excise

Tribunal allows appeals on excise duty for waste products, clarifies non-levy principles

Hindalco Industries Ltd., Shri Vijay Shankar Pandey Versus C.C.E. -Allahabad

The Tribunal set aside the Impugned Orders, allowing the appeals in full with consequential relief to the appellants. The judgment clarified the non-levy ... Whether ‘aluminium dross and skimmings’ which is a waste product arising in the course of manufacture of Aluminium products is liable to excise duty? Held that: - in view of CBEC Circular No.1027/15/2016-CX, dated 25.04.2016, the issue now stands settled in favor of the Appellant as it becomes abundantly clear that Aluminium dross, being a waste product produced during the manufacture of Aluminium products, cannot be subject to excise duty - Impugned Orders are liable to be set aside - appeal allowed. Issues:Whether 'aluminium dross and skimmings' arising during the manufacture of Aluminium products are liable to excise duty.Analysis:The case involved appeals regarding the liability of 'aluminium dross and skimmings' to excise duty. The Appellant, engaged in manufacturing Aluminium products, faced Show Cause Notices for clearing these waste products without duty payment. The Adjudicating Authorities confirmed the duty demands, leading to appeals before the Tribunal. The submissions highlighted judgments by the Bombay High Court and the Supreme Court, emphasizing that waste products not resulting from any process are not excisable. The Counsel referred to CBEC Circulars and subsequent Circular No.1027/15/2016-CX, rescinding earlier Circulars, to support the non-levy of excise duty on waste products. Citing precedents, the Appellant argued that Aluminium dross, as a waste product, is not excisable. Consequently, the Tribunal set aside the Impugned Orders, allowing the appeals in full with consequential relief to the appellants.This judgment clarifies the non-levy of excise duty on waste products like 'aluminium dross and skimmings' generated during the manufacture of Aluminium products. The legal analysis focused on the definition of 'manufacture' under the Central Excise Act, emphasizing that waste products not resulting from any process do not attract excise duty. The reliance on precedents from the Bombay High Court and the Supreme Court, along with the rescinded CBEC Circulars, supported the Appellant's case. The Tribunal's decision aligned with established legal principles and recent Circulars, providing clarity on the non-excisability of waste products like Aluminium dross. This comprehensive analysis underscores the importance of legal precedents, circulars, and statutory provisions in determining excise duty liability for waste products in manufacturing processes.