2003 (10) TMI 110 - AT - Central Excise

Summary

Issues involved: Whether slag obtained during the manufacture of Ferro Alloys is liable to Excise duty.

Analysis:
1. The appeal filed by M/s. Jain Carbide & Chemicals Ltd. raised the issue of whether the slag generated during the manufacture of Ferro Alloys is subject to Excise duty. The Appellants argued that the slag should be exempt from duty under specific notifications, citing a previous Tribunal decision. They contended that the slag is a by-product and not excisable. The Commissioner (Appeals) had upheld the duty demand, considering the Appellants as manufacturers of slag and ineligible for the exemption due to availing credit on inputs. The Appellants referenced the Tribunal's decision in the Tata Metaliks Ltd. case to support their position.

2. The Department argued that the slag, being generated during the manufacturing process of Ferro Alloys, is a marketable final product of the Appellants. They contended that since the slag is specifically mentioned in Chapter 26 of the Central Excise Tariff, it should be considered excisable. The Department relied on a Supreme Court decision to support the notion that regular production and sale of subsidiary products indicate an intention to manufacture and sell them. They emphasized that the Appellants' sale of slag for use in manufacturing Silico Manganese further supported its marketability.

3. Upon considering both arguments, the Tribunal noted that the Revenue did not dispute the generation of slag during the manufacture of Ferro Manganese, the final product. The Tribunal referenced the Tata Metaliks Ltd. case where it was held that slag produced during the manufacture of Pig Iron was not excisable, thus making any exemption under Notification No. 19/88 irrelevant. Following the precedent set by previous Tribunal decisions, the appeal was allowed in favor of the Appellants, as the slag was deemed non-excisable based on established case law.

This detailed analysis of the judgment highlights the arguments presented by both parties, the legal principles invoked, and the Tribunal's reasoning in arriving at the decision to allow the appeal based on established case law and precedent.