TaxTMI 
TaxTMI 
2006 (9) TMI 6
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....e 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 SCC 1]. 4. The Tribunal by reason of i....
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....eads 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 the manufacture or mechanical working of metal, and metal goods definitely not....
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....es 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 from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty, and (2) a proportionate credit should not be allowed to the assessees in respect of the excise duty paid o....
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....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 molten metal .... (2) Foreign matter mixed with anything (3) Refuse, rubbish, worthless matter especially as contrasted with or separated from something of value." The ASM Metals Reference Book (2nd Edn, 1983) pr....
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....he 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 'dross' as a marketable commodity but then percentage of metal in dross may not by itself make it excisable, if it is otherwise not. An article is not exigible to tax only because it may have some saleable value. 19. It may be that ....
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....upra), 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 have done nothing to discharge this onus." 23. It was further held: In our opinion, this Court in Indian Aluminium Co. Ltd. has held that merely selling does not mean dross and skimming are a marketable commodity as even rubbish can be sold and everyt....