1997 (8) TMI 349 - AT - Central Excise

Summary

Issues:
Interpretation of Central Excise Act, 1944 regarding classification of zinc dross and flux skimmings as goods subject to Central Excise duty.

Analysis:
The appellants challenged the order by the Collector, Central Excise, arguing that zinc dross and flux skimmings arising during the galvanization of steel sheets are waste products and not goods under the Central Excise Act, 1944. They contended that these products are not marketable and relied on the decision of the Supreme Court in a similar case involving aluminum dross and skimmings. The Revenue, however, argued that these items are covered under the Central Excise Tariff and are thus liable to duty.

The Tribunal considered the definition of "goods" under the Central Excise Act and referred to previous judgments, including one by the Bombay High Court, which held that dross and skimmings are not goods or end-products but merely refuse or scum from the manufacturing process. The High Court's view was affirmed by the Supreme Court in the case involving aluminum dross and skimmings, emphasizing that these items are waste or rubbish thrown up during manufacturing and do not constitute marketable commodities.

The Tribunal agreed with the appellants' argument that zinc dross and flux skimmings are refuse products based on the process of galvanization explained by the appellants. Citing the Supreme Court's decision in the aluminum case, the Tribunal set aside the Collector's order and allowed the appeals, concluding that the impugned items are not subject to Central Excise duty.

In light of the legal principles established by previous judgments and the specific nature of zinc dross and flux skimmings as waste products from the galvanization process, the Tribunal found merit in the appellants' arguments and ruled in their favor based on the Supreme Court's precedent regarding similar waste products in the aluminum industry.