Excisability of lead dross under central excise law failed where binding precedent ruled the demand unsustainable.

Lead dross arising during manufacture was disputed on classification and excisability, with central excise duty, interest and penalty confirmed under the Central Excise Act. The demand could not be sustained because binding judicial precedent had already held the contrary view unacceptable, and the controlling High Court decision, read with the Supreme Court ruling referred to therein, governed the issue. The demand and consequential penalties were therefore unsustainable, and the appeal was allowed.

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Issues: Whether the demand of central excise duty, interest and penalties on lead dross was sustainable.

Analysis: The dispute turned on the classification and excisability of lead dross arising during manufacture. The impugned demand had been confirmed under Section 11A of the Central Excise Act, 1944 with interest and penalty, but the issue stood covered by binding judicial precedent holding the contrary view unacceptable. In light of the controlling High Court decision and the binding Supreme Court ruling referred to therein, the earlier order could not be sustained.

Conclusion: The demand and consequential penalties were unsustainable and the appeal was allowed.

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