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TMI Blog2017 (12) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... e has come up before the Hon’ble Bombay High Court in the case of Hindalco Industries Limited vs. Union of India [2014 (12) TMI 657 - BOMBAY HIGH COURT] in which the Hon’ble High Court considered the dutiability of dross, skimming of various non-ferrous metal arising as process waste during the course of manufacture. The Hon’ble High Court has held that dross, skimming etc. are merely the refuse, scum or rubbish arising in the process of manufacture of aluminium sheets and, therefore, cannot be said the result of treatment, labour or manipulation whereby a new and different article emerges with a distinctive name, character or use - mill scale is not liable for levy of excise duty. Clandestine removal - shortages of finished products - H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finished products such as beams, billets and blooms. Further, it was noticed that certain goods viz; fly ash arising in the course of burning of coal in the furnace as well mill scale which is generated in the course of manufacture of M.S. beams/ channels were being cleared from the factory without payment of duty. The departmental officer recorded the statement of Sh. Kundan Das Vaishnav, A.S. of the appellant in which he admitted the stock shortage and paid duty attributable to such shortage of finished products. After conclusion of investigation, departmental proceedings were initiated in which the duty payable on the shortage alongwith the duty payable on mill scale as well as fly ash were sustained against the appellant. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lower authorities held that the Appellants are liable to payment of duty on the consideration received on sale of such fly ash. We note that the fly ash emerging during the course of generation of electricity cannot be considered as a manufactured product liable to Central Excise duty. In this connection, the observation of the Hon ble Madras High Court in Mettur Thermal Power Station (supra) is relevant. The Hon ble High Court recorded as below: 24. From the above judgment of the Supreme Court, it is clear that the first test of the process of levy of excise duty is that the product has to be produced or manufactured and the second test being that the product so produced or manufactured should be a marketable commodity. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere marketability of the product alone would not be suffice to levy duty on the fly ash , there being no manufacturing process involved. 6. The dispute in the present case is squarely covered by the findings of the Hon ble High Court, as above. Accordingly, we find no merit in the impugned order and set aside the same . 6. By following our earlier decision (supra) and considering the facts and circumstances of the case, we set aside the demand on fly ash. 7. Next we consider the duty demand raised on mill scale - The goods described as mill scale is said to be generated in the course of rolling of billets and blooms. It is claimed to be in the nature of process waste arising during the process of manufacture. It has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on such shortages. However, in the present appeal, the appellant has claimed that such shortages was as a result of stock verification on eye estimation basis and not on the basis of actual weighment of goods. The stock taking was carried out by the Officers in the factory in the presence of the Authorised Signatory and the panchas. After accepting the process of verification, it is not open to the appellant to challenge the conclusion of the stock taking at this stage. Once the appellant has accounted the finished products manufactured in its record, it is incumbent upon him to clear the same after payment of proper Central Excise duty. Having failed to do so, the appellant will be liable to pay such duty alongwith interest as has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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