Excise Duty Not Applicable on Ziking (Slag): Involuntary By-products Not Taxable as Goods

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....The CESTAT ruled that Ziking (slag), a by-product emerging during Silico Manganese manufacture, is not subject to excise duty. Following precedents in Monnet Ispat and Haryana Steel cases, the Tribunal determined that by-products involuntarily produced during manufacturing are not excisable goods. The demand of Rs.23,52,292/- on Ziking sales was set aside. Additionally, the Tribunal rejected the alleged shortage of Silico Manganese stock, finding that the verification was conducted merely on "eye estimation basis," which was insufficient to establish a shortage. Consequently, the demand of Rs.6,42,584/- was also set aside. With no sustainable demands, the Tribunal ruled that no penalties were imposable on the appellants. Appeal allowed.....