Manufacture and marketability test: aluminium dross and furnace dug out material were held non-dutiable excise goods.

Aluminium dross, skimmed refuse, pot dug out material and furnace dug out material were not treated as excisable goods because they did not emerge from a manufacturing process creating a new product under Section 2(f) of the Central Excises and Salt Act, 1944. Mere placement under Heading 26.20 of the Central Excise Tariff Act, 1985 was insufficient without the basic requirement of manufacture, and marketability was not shown. On that basis, the materials were held not dutiable to Central Excise duty, and the Revenue's appeal was rejected.

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Issues: Whether aluminium dross and furnace dug out material were excisable goods liable to Central Excise duty.

Analysis: The dispute turned on whether the impugned materials came into existence as a result of manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944. The materials were described as skimmed refuse, pot dug out material, and furnace dug out material, which did not undergo a manufacturing process bringing into existence a new product. Mere reference to Heading 26.20 of the Central Excise Tariff Act, 1985 was held insufficient without satisfying the basic requirement of manufacture. The criterion of marketability was also not established so as to make the items dutiable.

Conclusion: The aluminium dross and furnace dug out material were not excisable goods and no Central Excise duty was chargeable on them. The Revenue's appeal was rejected.

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