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2016 (12) TMI 1317 - AT - Central ExciseManufacture - marketability - Section 2(d) of the Central Excise Act, 1944 - during the process of manufacturing the transmission tower, zinc dross, zinc oxide, zinc ASH and zinc waste and scrap arise - clandestine removal - Held 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. 2014 (12) TMI 657 - BOMBAY HIGH COURT wherein it was held That is law declared under Articles 141 of the Constitution of India. That it is rendered in the case of identical issues, controversy and the Assessee makes these Judgments of the Supreme Court all the more binding. Their binding effect is not lost merely because the Tribunal has another occasion to consider the issue or another shade of the same controversy. So long as there are Supreme Court Judgments in the field, we do not see how the Revenue could have proceeded to disregard them - 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 - Appeal allowed.
Issues:
1. Duty liability on zinc dross, zinc oxide, zinc ASH, and zinc waste and scrap cleared without payment. 2. Interpretation of Section 2(d) of the Central Excise Act, 1944. 3. Applicability of judgments by the Hon’ble High Court and the Larger Bench of the Tribunal. 4. Compliance with Supreme Court decisions on excise duty imposition. Analysis: Issue 1: Duty liability on cleared items The appeal concerned the duty liability on zinc dross, zinc oxide, zinc ASH, and zinc waste and scrap cleared without payment during the manufacturing process of transmission towers. The Revenue contended that duty should be discharged on these items post the insertion of Section 2(d) of the Central Excise Act, 1944. Issue 2: Interpretation of Section 2(d) Upon reviewing the documents and the provisions of the Central Excise Act, 1944, it was noted that the issue was addressed in the judgment of the Hon’ble High Court of Bombay in the case of Hindalco Industries Ltd. The court clarified that the conditions under Section 2(d) and Section 2(f) must be satisfied conjunctively for excise duty imposition under Section 3 of the Act. Issue 3: Applicability of judgments The judgment highlighted that the Larger Bench of the Tribunal's decision on duty liability was incorrect, as it did not align with the Supreme Court's authoritative pronouncements. The Hon’ble High Court emphasized that the Tribunal must adhere to Supreme Court judgments, which are binding under Article 141 of the Constitution of India, especially when dealing with identical issues and controversies. Issue 4: Compliance with Supreme Court decisions The Tribunal's attempt to analyze the marketability and manufacturing process of waste, dross, and scrap conflicted with the Supreme Court's established principles. The court stressed that waste and scrap emerging as by-products do not automatically attract excise duty, as evidenced in the case of Grasim Industries Ltd. The Tribunal's deviation from Supreme Court judgments was deemed unjustified, leading to the setting aside of the impugned order and allowing the appeal. This comprehensive analysis of the judgment showcases the intricate legal considerations surrounding duty liability and the paramount importance of adhering to established legal precedents set by higher courts.
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