2016 (8) TMI 345 - AT - Central Excise

Excisability - Aluminium Dross and Skimming - arose during course of manufacture of aluminium - Held that - the issue is no longer res-integra and decided by the Tribunal in respondent s own case which squarely settled the matter in favour of the respondent where it was held that as per Apex Court judgment in the case of Union of India v. Indian Aluminium Co. Ltd., the dross and skimming of Aluminium are neither goods nor marketable commodities and, hence, are not liable to Excise duty. - Decided against the Revenue

Summary

Issues: Excisability of Aluminium Dross and Skimming

Analysis:
The appeal addressed the excisability of Aluminium Dross and Skimming arising during the manufacture of aluminium products in a factory. The Commissioner (Appeals) had set aside the duty demand confirmed by the Original Authority, ruling that these items are not excisable. The Revenue challenged this decision, leading to the present appeal before the Tribunal.

The Tribunal examined the excisability of Aluminium Dross and Skimming in light of a previous decision in the respondent's own case. The Tribunal referred to the Apex Court judgment in the case of Union of India v. Indian Aluminium Co. Ltd., which concluded that Aluminium Dross and Skimming are not goods or marketable commodities and, therefore, not liable to Excise duty. Despite a specific heading covering these items in the Central Excise Tariff, the Tribunal emphasized that mere inclusion in the tariff does not automatically imply excisability; the goods must be marketable to attract duty. The Tribunal also highlighted the importance of evidence demonstrating marketability, such as prices in commercial journals or existence on e-commerce platforms, which was lacking in this case.

Furthermore, the Tribunal considered Chapter Note 3 to Chapter 26 of the Tariff, which specifies that Heading 26.20 applies to ash and residues used in the industry for metal extraction or manufacturing metal compounds, indicating marketability. However, since no evidence was presented regarding the end use of the dross for aluminium extraction or compound production, the Tribunal concluded that the items in question did not fall under Heading 26.20 and were not marketable.

Based on the above analysis and the precedent set by the previous decision, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s ruling that Aluminium Dross and Skimming are not excisable. The decision was pronounced in open court, rejecting the Revenue's appeal in its entirety.