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2009 (9) TMI 152 - HC - Central ExciseAluminium Dross and Skimming excisability department seeking removal of goods on duty payment - explanation to Section 2(d) of the Central Excises and Salt Act, 1944 - Prima facie, we find that the insertion of the explanation under Section 2(d) providing for a fiction in law by a deeming clause in definition of goods to include any article, material or substance which is capable of being bought and sold for a consideration, and to treat such goods as marketable, would make the Aluminium Dross and Skimming liable to excise duty. - The excise duty is levied on production and manufacture which means bringing out a new commodity, substance, and it is implicit that such goods must be usable, saleable and marketable - If the goods are marketable or are deemed to be marketable, as on now by the explanation added to Section 2(d) of Section 78 of the Finance Act, 2008, such goods included in the Schedule would attract excise duty. - Aluminium Dross and Skimming liable to excise duty as per deeming fiction - at this stage, we are not inclined to grant any interim order.
Issues:
Challenge to letters/orders by Superintendent of Central Excise, classification of 'Aluminium Dross and Skimming' as excisable goods, interpretation of marketability for levy of excise duty, impact of explanation under Section 2(d) of Central Excise Act post-amendment. Analysis: The petitioner sought to quash letters/orders from the Superintendent of Central Excise regarding 'Aluminium Dross and Skimming,' arguing they are not produced or manufactured, hence not subject to excise duty. Citing various Supreme Court decisions, petitioner's counsel contended that these materials arise unintentionally during the manufacturing process and do not qualify as excisable goods. The Finance Act, 2008 amended Section 2(d) of the Central Excise Act, deeming goods marketable if capable of being bought or sold, potentially impacting the classification of 'Aluminium Dross and Skimming.' The counsel emphasized that despite the amendment, the materials in question are not processed or manufactured products but impurities formed during metal melting, not meeting the criteria for excise duty. The Superintendent's directive, based on the amended explanation, required proper invoicing for clearance of these materials post-19-8-2009. The petitioner argued that the amendment does not alter the established legal position that these materials are not marketable commodities and should not be subject to excise duty. The Court noted the amendment's effect in deeming goods marketable and potentially liable for excise duty, especially if listed in the Schedule. The judgment highlighted the link between marketability and levy of excise duty, emphasizing that goods must be usable, saleable, and marketable to attract duty. The legislative change prompted orders for proper invoicing before clearance, aligning with the new definition of marketability under Section 2(d) post-amendment. Consequently, the Court declined to grant interim relief at that stage, considering the impact of the amended explanation on the classification and taxation of 'Aluminium Dross and Skimming.' This detailed analysis covers the issues raised in the judgment, addressing the legal arguments, relevant precedents, statutory amendments, and the Court's interpretation regarding the classification and taxation of the materials in question.
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