TaxTMI 
TaxTMI 
1994 (9) TMI 183
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....etal waste scrap or not. He has held that since the dross and skimmings of aluminium are the product arising in the process of manufacture of metals or working of the metal by the appellant, those are rightly classifiable under sub-heading 7602.00. However, the Collector (Appeals) on appeal by the assessee has agreed with the appellants' contention and ordered for the classification under Chapter Heading 26.20.The reasoning given by the ld. Collector is that the Explanatory Notes to Heading 7204 covers ferrous waste and scrap arising out of manufacture of mechanical working of iron & steel and articles of iron & steel not usable as such because of breakage, wear or other reasons. The Explanatory Notes also exclude slag, dross, scalings or other wastes from the manufacture of iron or steel, even if suitable for recovery of metal and indicate classification of such dross and slag under Heading 26.20. The ld. Collector therefore, has held that since the provisions concerning waste and scrap in the Explanatory Notes of Heading 76.04 apply mutatis mutandis to Heading 76.02, it is clear that slag and dross of aluminium are also excluded from the scope of Heading 76.02, and hence would be....
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.... reads : "Metal waste and scrap from the manufacture of mechanical working of metals and metal goods definitely not usable as such because of breakage, cutting up, wear or other reasons". In view of this position, the revenue pleads that the Aluminium Dross & Skimmings are no more appropriately covered under Chapter 26 from 1-3-1988 and in view of newly inserted Note 6 (a), the item would be rightly classifiable under sub-heading 76.02. 4.We have heard Shri Somesh Arora, ld. JDR for the revenue and Shri N. Mukherjee, ld. Advocate for the respondents. 5. Ld. JDR relied on the definition of "Dross" appearing at page 394, and that of "slag" appearing at page 927 of Hawley's Chemical Dictionary, and argued that from the reading of the definition, it is clear that they arise during the manufacture of aluminium and hence, they are rightly classifiable under Chapter 76, as pleaded by the Revenue, in terms of the grounds made out in the appeal memo. 6. Countering the arguments of the Revenue, ld. Advocate submitted that the assessees do not manufacture metal from ore. They only melt Aluminium ingots. Due to the oxidation, the skimmings arise on the surface with imp....
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....l Section to Chapter 76, the item may be excluded from both the contending chapters and may fall under Chapter 28. 8. We have carefully considered the submissions made by both the sides, perused the records and also seen the contending tariff headings and the Explanatory Notes in HSN. 9. As can be seen from the Explanatory Notes to Chapter 76 in the `General' notes section at page 1002, it is stated therein that the chapter covers aluminium and its alloys and certain articles thereof. It further states that aluminium hydroxide and aluminium oxide are classified in Chapter 28. The sub-heading note in Chapter 76 reads as follows : "In this chapter the following expressions have the meanings hereby assigned to them : (a) Aluminium not alloyed : Metal containing by weight at least 99% of aluminium, provided that the content by weight of any other element does not exceed the limit specified in the following table : TABLE - OTHER ELEMENTS Element Limiting content % by weight Fe + Si (Iron plus Silicon) 1 Other elements ^(1), each 0.1^ (2) (1)Other elements are, for example, Cr, Cu, Mg, Mn, Ni, Zn (2) Copper is permitted in a ....
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.... get combined into a fused agglomerated moss. At page 394 of the Condensed Dictionary the definition of "dross" is referred to as that given in slag. Slag, at page 927 reads as follows : "Slag (dross, cinder) (1) Fused agglomerate (Usually high in silicates) which separates in metal smelting and floats on the surface of molten metal. Formed by combination of flux with gangue of ore, ash of fuel, and perhaps furnace lining. Slag is often the medium by means of which impurities may be separated from metal. (2)The residue or ash from coal gasification processes; it may run as high as 40% depending on the rank of coal used. Uses : Railroad ballast; highway construction; cement and concrete aggregate; raw materials for Portland cement, mineral wool and cinder block." This definition strengthens the argument of the assessee, that it is not a pure metal, as is in the case of `waste and scrap'. Its uses are also different like being put into Railroad ballast, for highway construction and other uses as indicated above. Therefore, `Dross' and `slag' are not indicative of being used for recovery of metal with 99% content of aluminium metal. As per the sub-heading note to Chapter 7....
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....ng e.g. spent or damaged catalysts in the form of platinum alloy gauge) (Heading 71.12). (c)Scrap metal resulting from the mechanical working of the metals of Section XV. (d)Zinc dust (Heading 79.03). The Explanatory Note states that "This heading covers ash and residues (other than those of heading 26.18 or 26.19) which contain metal or metallic compounds, and which are of a kind used in industry either for the extraction of metal or as a basis for the manufacture of chemical compounds of metals. They result from the treatment of ores or intermediate metallurgical products (such as mattes) or from electrolytic, chemical or other processes which do not involve the mechanical working of metal. Waste which derives from the mechanical working of metal, or scrap which consists of worn-out or broken metal articles is excluded (Section XIV or XV). On the other hand, scalings, which are essentially oxides although deriving from the mechanical working of non-ferrous metal, also fall in this heading. The heading includes : 1. Mattes (other than copper, nickel or cobalt mattes (Section XV) and slag or dross, for example those rich in copper, zinc, tin, lead, etc. 2.....