TaxTMI 
TaxTMI 
2006 (9) TMI 6
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....lting furnance, the top layer of the molten metal is exposed to atmosphere and gets oxidized. As a result of oxidation, a thin layer/film is formed which is removed by skimming. The second layer so removed is called dross. Indisputably, the percentage of metal in dross will vary and there would be some quantity of aluminium metal therein. 3. Whether excise duty is payable on 'dross' came up for consideration before a Bench of this Court in Respondent's own case i.e. in Union of India and Others v. Indian Aluminium Co. Ltd. and Another [1995 Supp (2) SCC 465: 1995 (77) E.L.T. 268]. The said decision has been followed by a 3-Judge Bench of this Court in Collector of Central Excise, Patna v. Tata Iron & Steel Co. Ltd. ' 9 SC....
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....620.00 of Heading 26.20 of the said Chapter reads as under: Heading Sub-Heading Description of Goods Rate of Duty 26.20 2620.00 Ash and residues (other than from the manufacture of iron of steel), containing, metals or metal compounds) 16% 8. Paragraph 3 of the Chapter Note states that the said Heading applies only to ash and residues of a kind used in industry either for extraction of metals or as a basis for the manufacture of chemicals compounds of metals. 9. Section XV of the Central Excise Tariff deals with base metals and articles of base metal. Note 8 defines waste and scrap to mean "metals waste and scrap from....
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.... Aluminium waste and scrap is an important source of raw material for the aluminium industry. It is also used as a de-oxidising or de-carburising agent in metallurgy. The heading does not cover: (a) Slag, dross, etc., from the manufacture of iron or steel containing recoverable aluminium in the form of silicates (heading 26.18 or 26.19). (b)Ash and residues from the manufacture of aluminium (heading 26.20) (c) Ingots and similar unwrought forms, cast from remelted aluminium waste and scrap (heading 76.01)." 11. In Indian Aluminium (supra), the contentions of Respondent were noticed in the following terms: "(1) that aluminium dross and skimmings are finished excisable goods produced by the assessees which are exempted fr....
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....ufacture or some small quantity of raw material may form part of wastage or ashes. This does not mean that the entire raw material was not used in the manufacture of finished excisable products. An ex act mathematical equation between the quantity of raw material purchased and the raw material found in the finished product is not possible, and should not be looked for." 13. What is the meaning of dross is the core question. 14. In Indian Aluminium (supra), this Court noticed the meaning of the term 'dross' in the following terms: "The term 'dross' is defined in The New Shorter Oxford English Dictionary as: "Dross, dregs ... (1) Impurities separated from metal by melting the scum which forms on the surface of molt....
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....hat the old tariff did not contain a specific entry as regards 'dross' when the decision of this Court was rendered but the question which arises for consideration is whether only because there now exists a specific entry in the Central Excise Tariff by way of 'ash and residue', would the same by itself make 'dross' subject to payment of excise duty .although no manufacturing process is involved. 18. The entry in question does not contain any legal fiction. It does not that any residue having more than a certain percentage of the metal would be deemed to have been manufactured or would be excisable. Records maintained by Respondent whereupon the Revenue has relied upon may be a relevant at factor to identify &#....
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....d that in Indian Aluminium (supra) itself this Court held that 'undoubtedly dross and skimming do arise during process of manufacture', but, it was not held therein that it amounts to manufacture. 21. In Tata Iron and Steel Co. Ltd. (supra), on the other hand, this Court noticed that dross and skimming are capable of being sold. This Court further opined that only because the article may have some saleable value, the same would not render it to be 'a manufactured product'. 22. This Court clearly opined: This Court, in conclusion, held that the onus to show that particular goods on which excise duty is sought to be levied have gone through the process of manufacture in India is on the Revenue and that the Revenue hav....