9911796707
TMI Blog2014 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... factured products' and hence, not liable to excise duty? 2. The above reference has been made in the context of four appeals filed by the appellant, M/s. Hindalco Industries Ltd. wherein the adjudicating/appellate authorities have held that aluminium dross and skimmings would merit classification under CETH 2620 4010 of the Central Excise Tariff Act and is liable to duty accordingly confirmed duty demands. The reason for taking this view is that Section 2(d) of the Central Excise Act, 1944 was amended w.e.f. 10/05/2008 so as to provide that: "(d) "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt; Explanation. - For the purposes of this clause, "goods" includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable." It is on account of this explanation, the Revenue seeks to classify aluminium dross and skimmings manufactured by the appellant under CETH 2620 4010 w.e.f. 10/5/2008. 3. The appellant is a manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Iron & Steel Co. Ltd. 2004 (165) 386 (SC (5) Indian Aluminium Co. Ltd. vs. Commissioner of Central Excise 2002 (53) RLT 219 affirmed by Kolkatta High Court and (6) Shri Ram Agro Chemicals (P) Ltd. vs. Union of India 2009 (234) ELT 218 (P&H). 4.2. The learned counsel for the appellant submits that the explanation was inserted in Section 2(d) in order to clarify that the goods which can be bought and sold in the market are deemed to be marketable and to put at rest the argument that the goods are not marketable in law even though they are bought and sold. In the judgments cited supra, for goods to be excisable two conditions need to be satisfied, that is, goods should be manufactured and they should be marketable. The explanation deals with only with the marketability aspect of the question and does not say that even non-manufactured goods are deemed to be manufactured goods. 4.3 The hon'ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. vs. Union of India [2014 (300) ELT 372 (All.)] had held that the explanation inserted w.e.f 10/05/2008 does not deem non-manufactured goods and in the said order, the CBEC Circular No. 904/24/2009-CX date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence about the marketability of bagasse. The learned consultant also placed reliance on the decision of this Tribunal in the case of Commissioner of Central Excise, Jalandhar vs. A.G. Flats Ltd. 2012 (217) ELT 96 wherein it was held that when a product emerges as a byproduct in the course of manufacture of some other product, that byproudct cannot be treated as a waste just because it is an unintended product arising in the course of manufacture of an intended final product. The byproduct would be waste only if it is of no value or negligible value, something which the manufacturer would want to get rid of. In the facts of the case before us, aluminium dross and skimmings emerges as by product during the course of manufacture of aluminium sheets/coils from aluminium ingots. These dross and skimmings have a substantial commercial value and cannot be treated as 'waste'. They also cannot be compared with bagasse which is the dry pulpy residue left after the extraction of juice from sugarcane, usable as fule or to make paper etc. The learned consultant submits that by the same process of manufacture, both aluminium sheets/coils and aluminium dross and skimmings come into existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing) is created specifically for a product only when the commodity is bought and sold on a regular basis on a substantial scale. This would imply that aluminium dross and skimmings are marketable commodities. Therefore, the only question left for consideration is whether they are 'manufactured' goods. 6.4 Explanation to section 2(d) of the Central Excise Act, 1944 was inserted to overcome certain adverse judicial decisions with regard to marketability of waste products. This is evident from the explanatory notes to clause 73 of Finance Bill, 2008 which reads as under: "Clause 73 seeks to amend section 2 of the Central Excise Act with a view to insert an Explanation in clause (d) which defines "excisable goods". The proposed Explanation provides that for the purposes of this clause, "goods" includes any article, material or substance which is capable of being bought and sold for consideration and such goods shall be deemed to be marketable. It will remove the ambiguity occurred due to the judgments in certain cases regarding the marketability of goods and it will be applicable prospectively." 6.5 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dross and skimmings. Therefore, the will of the legislature has to be given effect to by adopting a harmonious interpretation. In this view of the matter, it appears to us that w.e.f. 10/05/2008, aluminium dross and skimmings are liable to excise duty. 6.6 The hon'ble Apex Court in the case of Balwant Singh vs. Jagdish Singh [2010 (262) E.L.T. 50 (S.C.)] explained the principle of statutory interpretation as follows:- "It must be kept in mind that whenever a law is enacted by the legislature, it is intended to be enforced in its proper perspective. It is an equally settled principle of law that the provisions of a statute, including every word, have to be given full effect, keeping the legislative intent in mind, in order to ensure that the projected object is achieved. In other words, no provisions can be treated to have been enacted purposelessly. Furthermore, it is also a well settled canon of interpretative jurisprudence that the Court should not give such an interpretation to provisions which would render the provision ineffective or odious." If we apply the above principle of statutory interpretation to CETH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le apex Court, explanation was added to Section 2(d) to deem that if any goods are being capable of bought and sold, they shall be deemed to be marketable. Since the law has been amended w.e.f. 10/05/2008 to overcome the legal hurdle, the explanation has to be given the full effect. It is also very relevant to note that prior to Finance Act, 2005, there was no specific entry for aluminium and other metallic dross in the Central Excise Tariff. Therefore, in our humble view, on account of the changes made in the law, the ratio of various decisions cited by the appellant does not apply, as the issue considered in all these decisions related to 'marketability' and not 'manufacture'. Even in the Balrampur Chini Mills Ltd. (supra), on which much reliance has been placed, the said decision was rendered in the context of CENVAT Credit Rules. In the said case, the hon'ble Allahabad High Court observed that bagasse is an agricultural waste of sugar cane, though marketable product, but the duty cannot be imposed as it does not involve any manufacturing activity. This decision of the hon'ble Allahabad High Court will not apply to the facts before us for the reason that dross an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of manufacture of some other product, that by-product cannot be treated as a waste just because it is an unintended product arising in the course of manufacture of an unintended final product. The by-product would be waste only if it is of no value or negligible value, something which the manufacturer wants to get rid off. No evidence has been produced by the appellant herein that the products in question are of no value or of negligible value which it wants to get rid off. 6.10. In the A.G. Flats Ltd. case (supra), this Tribunal took a similar view and held that waxes, gums and soap stock emerging during the manufacture of refined vegetable oil and vanaspati are liable to excise duty. The hon'ble apex Court also upheld the view taken by the Tribunal that soap stock/fatty acid, waxes and gums which emerged in the course of manufacture of refined vegetable oil/vanaspati are manufactured goods, even though they are by-products as reported in 2014 (300) ELT A74. 6.11. The principles of res judicata and estoppels do not apply to tax matters especially when the law has undergone changes. The hon'ble Apex Court in the case of Bharat Sanchar Nigam Ltd. 2006 (2) S.T.R. 161 (S. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
