TaxTMI 
TaxTMI 
2021 (11) TMI 461
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....05/2008 on the allegation that aluminium dross is excisable goods, therefore, liable to duty. She submits that the issue, even after considering the amended provision under Section 2(d) of Central Excise Act, 1944, various judgments have been passed whereby it was held that aluminium dross and skimming are not liable to duty. She relies upon the following judgments. i. Hindalco Industries Limited v. Union of India [2015 (315) ELT 10 (Bom.) affirmed by apex Court reported at [2019 (367) ELT A246] ii. Balrampur Chini Mills Ltd v. Union of India [2014 (300) ELT 371 (All.)] iii. Union of India v. DFSCL Sugar Ltd [2015 (322) ELT 769 (SC)] iv. Hindalco Industries Ltd v. Commissioner of Central Excise, BBSR-II [2019 (4) TMI 1458 - CESTAT KOLKATA] v. Honda Motorcycle & Scoter India Pvt Ltd v. Commissioner of Central Excise, Gurgaon [2017 (3) TMI 638 - CESTAT CHANDIGARH] vi. KEC International Ltd v. Commissioner of Central Excise, Nagpur [ 2016 (342) ELT 418 (Tri.-Mumbai)] 3. Learned Authorised Representative Shri N N Prabhudesai reiterates the findings in the impugned order. 4. We have carefully considered the submissions of both sides and perused the records. Revenue's conte....
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....cted and the further appeal by the assessee before the CEGAT was allowed relying on the judgment of this Court in Indian Aluminium Co. Ltd. (supra). The Tribunal, following the judgment of this Court, categorically held that zinc dross and zinc scalling are not goods, hence not excisable. ........ 14. On the above pleadings and of the arguments, the following questions of law may arise for determination of this Court. The issue which arises for consideration is that whether zinc dross and flux skimming arising during galvanisation of steel sheets are goods within the meaning of the Central Excise Act, 1944 and are liable to central excise duty as classified by the Revenue. OR Whether zinc dross and flux skimming are waste products in the process of galvanisation of steel sheets and are not goods under the Central Excise Act, 1944 as claimed by the assessee. ........ 16. We are of the opinion that the dross and skimming are merely the refuse, scum or rubbish thrown in the process of manufacture of aluminium sheets and, therefore, cannot be said the result of treatment, labour or manipulation whereby a new and different article emerges with a distinctive name, character....
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....Shyam Oil Cake Ltd. v. CCE, (2005) 1 SCC 264 = 2004 (174) ELT 145 (SC), this Court has held : "16. Thus, the amended definition enlarges the scope of manufacture by roping in process which may or may not strictly amount to manufacture provided those processes are specified in the section or chapter notes of the tariff schedule as amounting to manufacture. It is clear that the legislature realised that it was not possible to put in an exhaustive list of various processes but that some methodology was required for declaring that a particular process amounted to manufacture. The language of the amended Section 2(f) indicates that what is required is not just specification of the goods but a specification of the process and a declaration that the same amounts to manufacture. Of course, the specification must be in relation to any goods. ........ 23. We are in agreement with the submission that under the amended definition, which is an inclusive definition, it is not necessary that only in the section or chapter note it must be specified that a particular process amounts to manufacture. It may be open to so specify even in the tariff item. However, either in the section or chapter....
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....eation of any new or distinct and excisable product. The process in relation to manufacture means a process which is so integrally connected to the manufacturing of the end product without which, the manufacture of the end product would be impossible or commercially inexpedient. This Court has in several decisions starting from Tungabhadra Industries v. CTO, AIR 1961 SC 412, Union of India v. Delhi Cloth & General Mills Co. Ltd., AIR 1963 SC 791 = 1977 (1) E.L.T. J199 (S.C.), South Bihar Sugar Mills Ltd. v. Union of India, AIR 1968 SC 922 = 1978 (2) E.L.T. J336 (S.C.) and in line of other decisions has explained the meaning of the word 'manufacture' thus : "14. The Act charges duty on manufacture of goods. The word 'manufacture' implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use." ........ 14. In the present case, it is clear that the process of repair and maintenance of the machinery of the cement manufacturing plant, in which M.S. scrap and Iron scrap arise, has no contribution or effect on the process of manufacturing of the ce....
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....al in para 6.5 in proceeding to analyse that the process and concluding that nobody deliberately manufactures waste, dross and scrap is in direct conflict with the findings of the Hon'ble Supreme Court. Waste and scrap emerge as a by-product in the course of manufacture of other products. The whole purpose of making these observations is to justify the conclusion that because there is a reference to these items in the Tariff Entry or the Tariff Schedule that would change the colour of the controversy. That would enable the Tribunal to then hold that the earlier Judgments and in the case of this very Assessee are no longer good law. However, we do not see how the decision in the case of Grasim Industries Ltd. (supra) and particularly the above reproduced paragraphs could have been brushed aside by the Tribunal. The Hon'ble Supreme Court listed the twin tests and which have to be satisfied before the goods can be said to be excisable to tax or Central Excise duty. It is in these circumstances that the attempt of the Tribunal and which is supported before us by Mr. Sethna cannot be upheld. Each of these observations and from para 6.5 onwards run counter to the Judgments of the Hon'ble....
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.... been totally disregarded by the Tribunal that we are unable to sustain and uphold its conclusions. The impugned order can be safely termed as perverse and vitiated by an error of law apparent on the face of the record. The Tribunal has reached a conclusion, which, no reasonable person in the position and as an adjudicating body could have reached. Its order passed on 19th August, 2014 and applied to the Petitioner's case is quashed and set aside. 25. The Rule is therefore, made absolute in terms of prayer clause (a). No order as to costs. All Circulars impugned in this Writ Petition and identical and brought to the notice of this Court would not therefore, survive after the legal position has been set out as above" 6. In KEC International Ltd (supra) it was held "4. We have gone through the documents and the provisions of the Central Excise Act, 1944. We find that learned counsel was correct in stating that the issue is now squarely covered by the judgment of the Hon'ble High Court of Bombay in the case of Hindalco Industries Ltd. - 2015 (315) E.L.T. 10 (Bom.). Their Lordships were considering the same issue after the Larger Bench of the Tribunal - 2014 (308) E.L.T. 472....
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....nd in the case of this very Assessee are no longer good law. However, we do not see how the decision in the case of Grasim Industries Ltd. (supra) and particularly the above reproduced paragraphs could have been brushed aside by the Tribunal. The Hon'ble Supreme Court listed the twin tests and which have to be satisfied before the goods can be said to be excisable to tax or Central Excise duty. It is in these circumstances that the attempt of the Tribunal and which is supported before us by Mr. Sethna cannot be upheld. Each of these observations and from para 6.5 onwards run counter to the Judgments of the Hon'ble Supreme Court." 5. In view of the foregoing, we hold that the impugned order is unsustainable and is liable to be set aside and we do so. The impugned order is set aside and the appeal is allowed." 7. In Commissioner of Central Excise, Raipur v. Bharat Aluminium Co Ltd [2015 (329) ELT 580 (Tri.Del.)] "4. We have considered the submissions of both the sides and perused the records. 5. The only point of dispute in the present case is as to whether the aluminium dross and skimming arising in course of manufacture of aluminium products during the period of dispute woul....