Marketability and residual waste classification determine excisability of lead slag and W.K. slag under tariff law.

Lead slag and W.K. slag arising as refuse in zinc and lead ingot manufacture were held not to be excisable because they were not shown to be manufactured products or marketable commodities in the commercial sense. Classification under Heading 2620.00 also failed because that heading applies only to ash and residues used for extraction of metals or as a basis for manufacturing metal compounds, and no such use was established. On that basis, the department's denial of exemption for captive consumption could not be sustained, and the duty demand and penalty were held unsustainable.

---

---

Issues: (i) whether lead slag and W.K. slag are excisable goods; (ii) whether they fall under Heading 2620.00 and could be denied exemption for captive consumption.

Issue (i): whether lead slag and W.K. slag are excisable goods.

Analysis: The slag arose only as refuse or waste in the course of manufacture of zinc and lead ingots. It had no recoverable metal of commercial value, was not shown to be a marketable commodity, and did not satisfy the requirement of manufacture or production necessary for levy of duty. Mere sale of such residue, without proof of marketability in the commercial sense, was insufficient to make it excisable.

Conclusion: Lead slag and W.K. slag were not excisable goods.

Issue (ii): whether they fall under Heading 2620.00 and could be denied exemption for captive consumption.

Analysis: Heading 2620.00 applies only to ash and residues used in industry either for extraction of metals or as a basis for manufacture of chemical compounds of metals. The materials in question were not shown to be used for either purpose. In the absence of such evidence, classification under Heading 2620.00 was not sustainable, and the denial of exemption on that basis could not stand.

Conclusion: The goods did not fall under Heading 2620.00 and were not liable to duty on the basis adopted by the department.

Final Conclusion: The duty demand and penalty were unsustainable, and the assessees succeeded with consequential relief.

Ratio Decidendi: A waste or residue arising in manufacture is not excisable unless it is shown to be a manufactured product and marketable in the commercial sense; heading-based classification of ash and residues applies only where the statutory use condition is satisfied.

---