Coal ash and cinder are not excisable absent manufacture; marketability alone cannot justify tariff classification.

Coal ash or coal cinder arising from captive consumption of coal in a power plant was treated as non-excisable because it was a residue of fuel consumption and not a manufactured product. Marketability alone was held insufficient to attract excise duty, and the material could not be brought within Tariff Sub-Heading 2621.00. The classification based on the Board's circular could not survive after the Gujarat High Court had quashed that circular and held that such residue did not meet the statutory test of manufacture.

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Issues: Whether coal ash or coal cinder arising from captive consumption of coal in the power plant was excisable and classifiable under Tariff Sub-Heading 2621.00.

Analysis: The impugned orders rested entirely on the Board's circular treating coal ash or cinder as excisable under the relevant tariff entry. That circular had already been quashed by the Gujarat High Court, which held that coal cinder is a residue of coal and not mere ash, that it is not a manufactured product, and that marketability by itself does not make it excisable. In view of that binding determination, the classification adopted by the lower appellate authority could not stand.

Conclusion: Coal ash or coal cinder was not excisable and could not be classified under Tariff Sub-Heading 2621.00; the issue was decided in favour of the assessee.

Ratio Decidendi: A residue arising from fuel consumption is not excisable merely because it is marketable, unless it answers the statutory test of manufacture and falls within the relevant tariff entry.

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