Aluminium dross and skimming from manufacture are not excisable goods where no distinct manufactured product emerges.

Aluminium dross and skimming generated unavoidably during the manufacture of aluminium motor vehicle parts were treated as refuse or waste, not as distinct commercially marketable goods. The Tribunal applied the principle that central excise duty requires both excisable goods and manufacture, and that inclusion in the tariff or potential sale does not by itself create dutiable manufacture. On that basis, dross and skimming were held not liable to central excise duty.

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Issues: Whether aluminium dross and skimming arising in the manufacture of aluminium motor vehicle parts amount to manufacture and are liable to central excise duty.

Analysis: The Tribunal followed earlier binding decisions holding that aluminium dross and skimming generated unavoidably in the manufacturing process do not emerge as a distinct commercially marketable product merely because they are included in the tariff or may be sold. It was noted that liability to excise duty requires the conjunctive satisfaction of the tests of excisable goods and manufacture, and that an inclusive or expanded definition of manufacture does not dispense with the need for a process specifically treated as manufacture in the statute or tariff entry. On that basis, the generation of dross and skimming during manufacture of aluminium parts was treated as refuse or waste, not as a manufactured excisable product.

Conclusion: Aluminium dross and skimming arising from the manufacture of aluminium motor vehicle parts do not amount to manufacture and are not liable to duty.

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