LexCOMMISSIONER OF CENTRAL EXCISE versus M/S. INDIAN ALUMINIUM CO. LTD.
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A COMMISSIONER OF CENTRAL EXCISE v. MIS. INDIAN ALUMINIUM CO. LTD. SEPTEMBER 29, 2006 B (S.B. SINHA AND DAL VEER BHANDARI, JJ.) Central Excise Tariff Act, 1985-Heading 26.20 'zinc dross' and 'flux skimming '-Dutiability-The articles previously held to be 'waste and scrap' not exigible to duty by Supreme Court-Subsequent changes in the tarijf- C Revenue demanding duty on the same on the ground that the articles contained high percentage of metal and the same were marketable-Held: The articles are not dutiable as they are not manufactured products-The commodity is not exigible for tax only because it has saleable value and contains high percentage of metal. D Words and Phrases: · Manufacture'--Meaning of The question for consideration in the present case was whether 'zinc dross' and 'Dux skimming' which were extracted in the process of manufacture of aluminium sheets by the respondents are excisable articles. The Tribunal E relying on Indian Aluminium and Tata Iron and Steel cases held that the same were not excisable. In appeal to this Court appellant-Revenue contended that the articles are excisable as the same are ash and residue in view of chapter heading 26.20 of Central Excise Tariff, and since they are marketable commodity containing F high percentage of aluminium and that the Indian Aluminium case was not applicable as at the time that judgment was rendered there was no specific entry for dross. Dismissing the appeal, the Court G HELD: I. Only because there now exists a specific entry in the Central Excise Tariff by way of 'ash and residue', the same would not by itself make dross subject to payment of excise duty although no manufacturing process was involved. (892-D( I-I 886 COMMNR. OF CENTRAL EXCISE 1•. INDIAN ALUMINIUM CO.LTD. [SINHA, J.] 887 2. The entry in question does not contain any legal fiction. It does not A say that any residue having more than a certain percentage of the metal would be deemed to have been manufactured or would be excisable. Records maintained by respondent whereupon the Revenue has relied upon may be a relevant factor to identi.fy 'dross' as a marketable commodity but then percentage of the metal in dross may not by itself make it excisable, if it is B otherwise not. An article is notexigible to tax only because it may have some sal~able value. !892-EI ·3. It may be that dross no longer answers the description of"waste and scrap" in view of the changes made in the Tariff. It is, however, almost well- settled that even if some percentage of metal is found in the dross the same C in absence of something more in the entry would not be ~endered as an excisable article. Even assuming that dross having a high percentage of metal is a marketable commodity, the question would arise as to whether the same can be said to be a manufactured product. The term 'manufacture' implies a change. Every change, however, is not a manufacture. Every change of an article may be the result of treatment, labour and manipulation. But manufacture D would imply something more. There must be a transformation; a new and different article must emerge having a distinctive name, character or use. 1892-F, H; 893-Al Union of India and Ors. v. Indian Aluminium Co. Ltd. and Anr., (1995) Supp 2 SCC 465 and Collector of Central Excise, Patna v. Tata Iron and Steel E Co. Ltd, [2004) 9 SCC 1, relied on. Union of India and Anr. v. Delhi Cloth and General Mills Co. Ltd., AIR 1963 SC 791, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 240 of2005. From the final Order No. 645/04-NB(A) dated 25.6.2004 of the CESTAT, New Delhi in Appeal No. E/4126/30-NB(A). F Gopal Subramanium, A.S.G.., T.S. Murthy, Raghavendra Rao, P. Parmeswaran and B. Krishna Prasad for the Appellant. U V. Lakshimkumaran, Raj esh Kumar and Alok Yadav for the Respondent. The Judgment of the Court was delivered by · S.B. SINHA, J. \Vhether zi11~, ~!irs\~d:fl~~}~'.11i?~ are excisable H . /- •. - - , 1,· ~-~~;·;-·':: 888 SUPREME COURT REPORTS (2006) SUPP. 6 S.C.R. A articles is the question involved in this appeal, which arises out of a judgment and order dated 25.06.2004 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, allowing the appeal filed by Respondent herein. Respondent herein manufactures aluminium sheets, the raw material B wherefor is aluminium oxide. In the melting furnance, the top layer of the molten metal is exposed to atmosph
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