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TMI Blog1995 (4) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... d from it, which fall under the residuary Tariff Item 68.Appeal dismissed. - 4676 with Appeal Nos. 1423, 2759 & 3982 of 1987 - - - Dated:- 19-4-1995 - A.M. Ahemdi, C.J.I., N.P. Singh and Sujata V. Manohar, JJ. [Judgment per : Sujata V. Manohar, J.]. - All these appeals have been filed at the instance of the Union of India and the Collector of Central Excise. The respondents in all these appeals manufacture aluminium products such as aluminium sheets, aluminium shapes, aluminium angles etc. out of aluminium ingots. In the process of manufacture, at the stage of processing, dross and skimming arise and accumulate in the furnace in the shape of ashes as a result of oxidisation of metal. These ashes are formed mainly during the melting down of aluminium ingots and, to some extent, during subsequent treatment and holding operation of molten baths in the furnace. Dross consists mostly of oxides, non-metallic material and other foreign material which separates or forms during melting and holding operations, and finally accumulates on the surface of the molten bath. It has to be removed. Skimmings are mostly thin oxide layers obtained by skimming a molten bath prior to metal tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Collector. However, the Appellate Collector of Central Excise allowed the appeal preferred by the assessees. A revision preferred by the Excise Authorities was, however, allowed by the Government of India. This decision was challenged by the assessees by filing a writ petition which was allowed by a learned Single Judge of the High Court. An appeal before the Division Bench of the High Court was summarily dismissed. The present appeal is filed by the department from the decision of the Division Bench of the Bombay High Court upholding the decision of a learned Single Judge of that Court. 8.Under Section 3 of the Central Excises and Salt Act, 1944, there shall be levied and collected, in such manner, as may be prescribed, duties of excise on excisable goods other than salt with are produced or manufactured in India. 9."Excisable goods" are defined under Section 2(d) as meaning "goods specified in the First Schedule as being subject to a duty of excise..." Since aluminium dross and skimmings were not covered by Item 27 of the First Schedule, they were not excisable goods as defined in Section 2(d). 10.Both aluminium ingots and aluminium sheets manufactured out of ingots ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ole of the duty of excise leviable thereon or are chargeable to nil rate of duty...." In other words, the contention of the department appears to be : (1) that aluminium dross and skimmings are finished excisable goods produced by the assessees which are exempted from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty, and (2) A proportionate credit should not be allowed to the assessees in respect of the excise duty paid on that portion of aluminium ingots which "result in the manufacture" of aluminium dross and skimmings. This argument proceeds on the assumption that aluminium dross and skimmings are finished excisable goods. If one looks at the definition of excisable goods, it is clear that aluminium dross and skimmings were not in the First Schedule to the Central Excises and Salt Act, 1944 at the relevant time and are not excisable goods, finished or otherwise. 13.It is also not possible to accept the contention of the appellants that aluminium dross and skimmings are "goods" or marketable commodity which can be subjected to the levy of excise. Undoubtedly, aluminium dross and skimmings do arise during the process of manufacture. But th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m part of wastage or ashes. This does not mean that the entire raw material was not used in the manufacture of finished excisable products. An exact mathematical equation between the quantity of raw material purchased and the raw material found in the finished product is not possible, and should not be looked for. 15.This Court, in the case of M/s. Multimetals Ltd. v. Assistant Collector, Central Excise, Kota Ors. [1992 (57) E.L.T. 209 (S.C.)] = [1992 (1) SCC 715] has considered an Excise Notification dated 28th of December, 1963 bearing No. GSR 1957 which gives a credit, in respect of duty paid on copper and copper alloys in any crude form used in the manufacture of copper products. The Court observed that in the process of manufacture, a portion of the copper and copper alloys in crude form was lost. The Court negatived the contention of the Revenue that the rebate granted should relate only to the copper and copper alloys content of the final product and, therefore, only that quantity that was found in the finished product would get relief, and not the entire quantity which was put in the process of manufacture. This Court held that it was the duty paid on the input material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Court also approved of the decision of the Bombay High Court in the case of Indian Aluminium Co. Ltd. Anr. v. A.K. Bandyopadhyay Ors. [1980 (6) E.L.T. 146 (Bom.)] from which judgment the present appeal is filed. 17.In the premises, we agree with the reasoning and conclusion of the learned Single Judge of the Bombay High Court from whose judgment an appeal was dismissed by a Division Bench of the Bombay High Court and which judgment is under challenge before us. The appeal is, therefore, dismissed with costs. CIVIL APPEAL NOS. 1423, 2759 AND 3982 OF 1987 18.The manufacturers in all these appeals were also engaged, at the material time, in the manufacture of aluminium goods out of aluminium ingots. Their cases, however, are a little different from the case of Indian Aluminium Co. Ltd. because we are concerned with the manufacture of these aluminium goods during a subsequent period when there were some changes in the Excise Tariff. 19.Under Tariff Item 27 "Waste and Scrap of Aluminium" is one of the items exigible to excise duty. An Explanation was added to Tariff Item 27 by the Finance Act, 1981 to the following effect : "27: Explanation. - (1) `waste and scrap' me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.The Explanation to Item 27 is not for the purpose of separating certain types of wastes and scrap from the main Item of "Waste and Scrap of aluminium" and thus making it exigible to tax under Item 68. The Explanation to Item 27 merely excludes from waste and scrap certain residues or rubbish which cannot be categorised as "goods"at all. It is only those goods, which are otherwise liable to be included in a given Tariff Item, but are expressly excluded from it, which fall under the residuary Tariff Item 68. The Customs, Excise and Gold (Control) Appellate Tribunal in its order, which is the subject-matter of Civil Appeal No. 1423/87, has given several examples of this kind of exclusion which is covered by the Explanation to Tariff Item 68. It has given the illustration of a motor specially designed for use in a gramophone or record player which is expressly excluded from Tariff Item 30 which covers electric motors. These excluded motors are also motors, but because of some peculiar characteristics imparted to them in their manufacture, they are excluded for assessment under Tariff Item 30. Similarly, slotted angles and channels made of steel which can be used as part of steel f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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