Manufacturing residue and excisability: mill scale cleared for consideration was not enough to sustain central excise demand.

Mill scale arising incidentally during manufacture and cleared for consideration was examined for excisability under the Central Excise Tariff. The Tribunal noted that prior decisions had already addressed the issue by focusing on the nature of the goods, tariff coverage, and the amended definition of excisable goods, and it also noted that the 2009 Board Circular relied on in the impugned order had been withdrawn. On that basis, the duty, interest, and penalty demand was found unsustainable and the impugned order was set aside.

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Issues: Whether mill scale arising in the course of manufacture and cleared for consideration is dutiable as excisable goods, and whether the demand of duty, interest and penalty could be sustained.

Analysis: Mill scale arose incidentally during manufacture of the finished products and was treated by the adjudicating authority as falling under Chapter 2619 of the Central Excise Tariff Act, 1985. The Tribunal noted that the controversy had already been addressed in earlier decisions holding that the relevant legal position turned on the nature of the goods, their tariff coverage, and the effect of the amended definition of excisable goods. It also noted that the 2009 Board Circular relied on in the impugned order had subsequently been withdrawn. On the facts, the impugned demand was not found sustainable.

Conclusion: Mill scale cleared by the assessee was not held exigible on the reasoning adopted in the impugned order, and the duty, interest, and penalty demand could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed, granting complete relief to the assessee.

Ratio Decidendi: A manufacturing residue or waste cleared for consideration is not automatically dutiable merely because it is saleable or described in the tariff; excisability must still be justified on the governing statutory tests and applicable legal position.

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