2019 (4) TMI 1458 - AT - Central Excise

Excisability - waste - aluminium dross and skimmings arising in the course of manufacture of aluminium products - HELD THAT - Aluminium dross, being a waste product emerging during the manufacture of Aluminium products, cannot be subject to excise duty. Hon ble Supreme Court in the matter of UNION OF INDIA VERSUS DSCL SUGAR LTD. 2015 (10) TMI 566 - SUPREME COURT , has held that waste product/residue, which itself is not the result of any process, cannot be treated as falling within the definition of Section 2(f) of the Act and in the absence of manufacture, there cannot be any excise duty. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether 'aluminium dross and skimmings' arising in the manufacture of aluminium products are liable to excise duty.

Analysis:
The Appellant, engaged in manufacturing aluminium products, faced a demand for excise duty on clearance of Aluminium Dross, a waste product generated during manufacturing. The issue revolved around whether the dross was 'marketable' as per the Central Excise Act. The Adjudicating Authority confirmed the duty demand, leading to an appeal. The Appellant cited a Bombay High Court judgment and a Supreme Court ruling in DSCL Sugar Ltd.'s case to argue that waste products not resulting from a process are not subject to excise duty. Referring to a CBEC Circular rescinding previous circulars, the Appellant contended that Aluminium dross, as a waste product, is not excisable. The Department conceded that the issue favored the Appellant based on the legal precedents and circulars.

The Tribunal, considering the Supreme Court and Bombay High Court judgments along with the CBEC Circular, ruled in favor of the Appellant. It concluded that Aluminium dross, being a waste product in the manufacturing process, is not liable for excise duty. The impugned order demanding duty was set aside, and the appeal was allowed with any consequential relief for the Appellant. The decision aligned with the legal interpretation that waste products not resulting from a manufacturing process are not subject to excise duty, as clarified by the courts and circulars.

This comprehensive analysis highlights the legal journey of the case, from the demand for excise duty on Aluminium dross to the Appellant's successful appeal based on legal precedents and circulars. The judgment emphasizes the non-levy of excise duty on waste products like Aluminium dross, showcasing the significance of legal interpretations and circulars in tax matters.