2013 (11) TMI 956 - AT - Central Excise

Conflicting views in different decisions of the same Tribunal - Clandestine Removal of goods Assessee manufactured aluminium dross and skimmings Activity manufacture or not - Held that - In Bhushan Steel Ltd. vs. Commissioner of Central Excise 2013 (4) TMI 158 - CESTAT, MUMBAI it was held that Notwithstanding the addition of Explanation to Section 2 (d) of the Central Excise Act, since the Zinc Dross is not a manufactured product, it cannot be considered as an excisable product thus, they are not liable to duty and in KEC International Ltd. vs. Commissioner of Central Excise, Jaipur-I 2012 (12) TMI 426 - CESTAT, NEW DELHI in view of the addition of Explanation to Section 2 (d), Zinc Dross is to be deemed as marketable and, therefore, they have to be considered as excisable goods and liable to excise duty - There are conflicting decisions to two Benches of the Tribunal, the matter should be placed before a larger Bench of the Tribunal for resolution of the conflicting views. - matter referred to larger bench.

Summary

Issues:
1. Classification of aluminium dross and skimmings under the Central Excise Tariff Act, 1985.
2. Liability of the appellant to discharge duty on aluminium dross and skimmings.
3. Interpretation of the Explanation added to Section 2(d) of the Central Excise Act, 1944.
4. Conflict between the decisions of different benches of the Tribunal regarding the marketability of certain by-products.

Issue 1:
The appellant, a manufacturer of aluminium products, faced demands from the department for clearing aluminium dross and skimmings without duty payment. The department classified these under CETH 26204010 of the Central Excise Tariff Act, 1985. The appellant contested this classification.

Issue 2:
The appellant argued that based on a previous Tribunal case involving Zinc Dross, which was deemed non-liable for duty post an amendment to Section 2(d) of the Central Excise Act, aluminium dross should also not attract excise duty. The appellant sought relief from the duty demands and penalties imposed.

Issue 3:
The Revenue contended, citing a different Tribunal case, that the Explanation to Section 2(d) deems certain substances marketable, making them liable for excise duty. The Revenue maintained that aluminium dross falls under this category and is therefore excisable.

Issue 4:
Upon reviewing conflicting decisions from different Tribunal benches, the current bench decided to refer the matter to a larger bench for resolution. The conflicting views centered on whether aluminium dross and skimmings should be considered excisable goods post the amendment to Section 2(d) or if they are not liable for excise duty despite the explanation.

In conclusion, due to conflicting interpretations of the law, the matter was referred to a larger bench for resolution. The key question was whether aluminium dross and skimmings, as by-products of manufacturing, should be deemed excisable goods post the amendment to Section 2(d) of the Central Excise Act, 1944. The decision hinged on the marketability of these by-products and their classification under the Central Excise Tariff Act, 1985.