2006 (9) TMI 6 - SC - Central Excise

Central Excise Zinc dross and flux skimming arise during manufacturing process there in not amounts to manufacture Revenue not contended that article obtained during manufacturing process Article not exigible to tax only because it has saleable value

Summary

Issues:
Whether zinc dross and flux skimming are excisable articles.

Analysis:
The appeal concerns the excisability of zinc dross and flux skimming, arising from a judgment by the Customs, Excise & Service Tax Appellate Tribunal. The respondent manufactures aluminum sheets, where dross is a byproduct removed during the manufacturing process. The Tribunal, following previous decisions, held that the issue is covered by existing judgments. The appellant argued that the classification of dross has changed under the Central Excise Tariff Act, making it a marketable product subject to excise duty. However, the respondent contended that dross is not a manufactured item but a byproduct in the manufacturing process.

The Central Excise Tariff categorizes dross under ash and residues, not as waste or scrap. The appellant highlighted that dross contains a high percentage of aluminum and is marketable, thus falling under the definition of "goods." However, the respondent argued that the presence of metal in dross does not automatically make it excisable. The court examined previous judgments and definitions of dross to determine its excisability.

The court referenced earlier cases to establish that the mere saleability of an article does not make it a manufactured product subject to excise duty. It was emphasized that the onus is on the Revenue to prove that the goods have undergone a manufacturing process in India. The court concluded that zinc dross, flux skimming, and zinc scaling are not excisable goods based on past decisions and upheld the Tribunal's ruling. The judgment dismissed the appeal, citing no merit and no costs awarded.