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2015 (6) TMI 116 - HC - Central ExciseDuty demand - whether Zn-dross is excisable goods or not - Held that - Petitioners have actually sold away this Zn-dross in open market for lakhs of rupees. These lakhs of rupees have been mentioned in all the four O-in-Os by the Assistant Commissioner of Central Excise, Jamshedpur. Therefore, Zn-dross is undoubtedly produced by these petitioners and they are produced as a by-product of galvanized tubes. Several times it happens that several by-products are also produced whenever main product is being manufactured Though the zinc dross produced by M/s Neepaz Tube Pvt Ltd had zinc contents more than 96 % in it, they cleared the same with-out payment of central excise duty and they neither reflected the production of zinc dross in their Daily Stock Account nor did they disclose this fact to the department through monthly ER-1 Return or through any other documents/submission. On the basis of specific classification of Zinc Dross in Central Excise Tariff with the amendment CETA, 1985 (Central Excise Tariff (Amendment) Act, 2004) wef 28.02.2005, an investigation was conducted by the department and sample of the zinc dross was drawn and tested and National Metallurgical Laboratory, Jamshedpur as regards to the recovery of percentage of zinc in the said zinc dross and it found to have contained 96.08 % of Zinc in it which is much more higher than the prescribed minimum percentage to qualify its place in tariff item No. 79020010 of Central Excise Tariff (Amendment) Act, 2004 w.e.f 28.02.2005 and thereby it is liable to Central Excise Duty @ 16 %Adv. It is produced due to manufacturing process of galvanized tubes and it is commercially another item and as it is marketable, it is excisable goods. Thus, all the ingredients of Section 2(d) and 2(f) have been fulfilled by Zn-dross . This item is, therefore, excisable and thus, no illegality has been committed by the Assistant Commissioner, Jamshedpur while passing order in O-in-O in all these four writ petitions. - Zn-dross has been sold away by these petitioners in the open market. There is definite sale value of the Zn-dross and, therefore, ad valorem duty is levied by the order of Assistant Commissioner of Central Excise, Jamshedpur and thus no illegality has been committed by the Assistant commissioner of Central Excise in passing Order-in-Originals. Zinc content is more than 96% in a Zn-dross which is a byproduct of main manufacturing process of galvanized tubes and this by-product viz. Zn-dross is a commercially another item, which is saleable and purchasable in a market. In the facts of the present case, actually it has been sold away by the petitioners worth rupees several lakhs, the Zinc-dross produced by these petitioners is undoubtedly arising out of manufacturing process and is undoubtedly excisable goods and, therefore, under the charging Section viz. Section 3 of the Central Excise Act, 1944 the central excise duty is rightly imposed and levied by the Union of India. - no reason to entertain these writ petitions - Decided against assessee.
Issues Involved:
1. Delay in filing appeals and jurisdiction to condone delay. 2. Legality of invoking writ jurisdiction under Article 226 of the Constitution of India. 3. Whether "Zn-dross" is excisable goods under Section 2(d) and 2(f) of the Central Excise Act, 1944. 4. Validity of the Orders-in-Original (O-in-O) and the subsequent appellate decisions. Detailed Analysis: 1. Delay in Filing Appeals and Jurisdiction to Condon Delay: The petitioners' appeals were dismissed by the Commissioner (Appeals) and the CESTAT due to delays beyond the condonable period of 30 days as per Section 35(1) of the Central Excise Act, 1944. The Commissioner (Appeals) relied on the Supreme Court's decision in *Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur* (2008) 3 SCC 70, which established that delays beyond 30 days cannot be condoned. Consequently, the CESTAT upheld the Commissioner's decision, leading the petitioners to file writ petitions. 2. Legality of Invoking Writ Jurisdiction under Article 226: The petitioners argued that despite the availability of alternative remedies, the High Court's writ jurisdiction under Article 226 can be invoked to prevent miscarriage of justice. The court affirmed this position, stating that no statute can abridge the High Court's writ jurisdiction. The court cited decisions from the Gujarat High Court in *D.R. Industries Ltd. Vs. Union of India* (2008) 229 E.L.T. 24 (Guj.) and the Punjab and Haryana High Court in *JCB India Ltd. V. Union Of India* (2014) 301 E.L.T 209 P&H, which supported the invocation of writ jurisdiction in extraordinary circumstances. 3. Whether "Zn-dross" is Excisable Goods: The core issue was whether "Zn-dross," a by-product in the manufacturing of galvanized tubes, is excisable under Section 2(d) and 2(f) of the Central Excise Act, 1944. The petitioners contended that "Zn-dross" is not manufactured or produced by them and hence not excisable, despite being saleable and marketable. They relied on Supreme Court judgments in *Collector of Central Excise, Patna Vs. Tata Iron & Steel Co. Ltd.* (2004) 9 SCC 1 and *Commissioner of Central Excise Vs. Indian Aluminium Co. Ltd.* (2006) 8 SCC 314. However, the court noted that the tariff entry for "Zn-dross" under item 7902-0010 was amended on 28th February 2005, making it excisable if it contains more than 90-92% Zinc. The court found that the "Zn-dross" produced by the petitioners had Zinc content exceeding 96%, making it excisable. 4. Validity of the Orders-in-Original (O-in-O) and Subsequent Appellate Decisions: The court upheld the Orders-in-Original passed by the Assistant Commissioner, Central Excise, Jamshedpur, which imposed excise duty on "Zn-dross" based on its high Zinc content. The court rejected the petitioners' reliance on the Supreme Court judgments, noting that the facts of the present case, particularly the high Zinc content, distinguished it from the cited cases. The court also dismissed the petitioners' reliance on a circular from the Central Board of Excise and Customs, as the specific pending matter before the Supreme Court was not identified. Conclusion: The court dismissed the writ petitions, affirming that "Zn-dross" with more than 96% Zinc content is excisable under the amended tariff entry and upholding the legality of the Orders-in-Original and subsequent appellate decisions. The court emphasized that the writ jurisdiction under Article 226 remains intact despite statutory limitations on condoning delays in appeals.
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