of Central Excise, Patna Vs. M/S Tata Iron & Steel
Company Ltd  Insc 128 (26 February 2004)
Babu, Dr. Ar. Lakshmanan & G.P. Mathur.
Appeal Nos. 5664 of 2002 and 5262 of 2003 Dr. AR. Lakshmanan, J.
these appeals, we are concerned with the question of levy of excise duty on
zinc dross and flux skimming arising during galvanisation of steel sheets.
FACTS OF THE CASE:
galvanisation of steel sheets, zinc dross and flux skimming arises which the
respondent/assessee has declared as by- product in their product manual
published by the Marketing Division for information of customers. It has been
alleged that zinc dross and flux skimming are being sold by the assessee to
various customers without making any declaration in the classification list,
without paying any duty on clearance of the above product and without
maintaining any records prescribed under the Central Excise Rules, 1944 besides
showing them as non-excisable in their Despatch Advices.
to the Department, the assessees have cleared the goods without payment of duty
and thus evaded duty in contravention of the Central Excise Rules, 1944 and in
doing so they did not obtain Central Excise licence for manufacture of zinc
dross and flux skimming as required under Rule 174 of the Central Excise Rules,
1944 inasmuch as they have suppressed the production and removal of the said
goods with intent to evade payment of duty.
FOR THE DEPARTMENT:
cause notice was issued to the assessee to show cause why a penalty should not
be imposed on them under the provisions of the Central Excise Rules, 1944 and
why the duty be not demanded under Rule 9 (2) of the Central Excise Rules,
FOR THE PARTY:
response to the show cause notice, the assessee made a written defence denying
all the allegations of contravention of various Central Excise Rules and stated
that flux skimming is a material held as non-excisable by the CEGAT. In support
of their contention, they have cited various judgments and, in particular, the
case of Indian Aluminium Co. Ltd. vs. A.K. Bandyopadhyay [1980(6) E.L.T. 146 (Bom.)]
stating further that dross and skimming are neither goods nor end products nor
finished goods attracting duty under item 25 of the Central Excise Tariff. As
regards zinc dross, they have claimed to clear the item as non-excisable as per
the decision of the Bombay High Court.
the contention of the assessee that they do not manufacture zinc and article
thereof but they do galvanise sheets falling under Chapter 72. Since zinc dross
and flux skimming have already been held to be non-excisable item, the issue of
gate passes for removal of products and submission of quarterly returns etc.
and filing classification list does not arise. All the assesses have denied
violation of the Central Excise Rules, 1944. They have further stated that they
submitted classification list and are in the bona fide impression that the
goods are non-excisable and are not manufactured by them and, therefore, the
question of imposing penalty under any rule is out of question.
Civil Appeal Nos. 524 and 525 of 1998, the Collector of Central Excise, Patna ordered for confiscation of the
zinc dross. However, the Collector gave the manufacturers the option to redeem
the goods on payment of redemption fine. A penalty was also imposed on the
manufacturer. The assesses preferred an appeal to the CEGAT, New Delhi which
set aside the order of the Collector, Central Excise relying upon the decision
of this Court in the case of Union of India vs. Indian Aluminium Co. Ltd. [1995
(77) E.L.T. 268 (S.C.)]. Aggrieved by the said decision, the Commissioner of
Central Excise, Patna preferred the above two appeals.
Civil Appeal No. 5262 of 2003 M/s National Steel Industries Limited now known
as M/s National Steel and Agro Industries Limited filed declaration classifying
the zinc dross under Heading 7902.00 of the Schedule to the Central Excise
Tariff Act, 1985. According to the assessee, they filed declaration claiming
the zinc dross as non- excisable commodity and continued to clear zinc dross
without payment of duty up to December, 1997. Later, they paid duty under
protest. A show cause notice was issued as to why zinc dross should not be
classified under Heading 7902.00 and why excise duty should not be recovered.
The Deputy Commissioner of Central Excise held the goods classifiable under
Heading 7902 of the Central Excise Tariff Act, 1985 and confirmed the payment
of penalty which was imposed. The Commissioner (Appeals) rejected the appeal
filed by the assessee. The Tribunal, on appeal by the assessee, set aside the
order in appeal holding that zinc dross and flux skimming are not excisable
goods following the decision of this Court in Indian Aluminium Co. Ltd.
(supra). The Tribunal further relied on the decision in the case of Tata Iron
and Steel Company Limited vs. CCE, Patna [2001 (135) E.L.T. 1142] and Siddarth
Tubes Limited vs. CCE, Indore dated 08.04.2002 which referred to the judgment
in the case of Indian Aluminium Co. Ltd. (supra). Before the Tribunal, it was
submitted by the Department that zinc dross is a distinct commercial commodity
and hence liable to excise duty.
Appeal No. 5664 of 2002 also arises out of similar circumstances. In this
appeal, according to the assessee, zinc dross and zinc scalling does not
constitute to be excisable goods as defined in Section 2(d) of the Central
Excise Salt Act, 1944 and, therefore, they filed refund claims for amount of
duty paid on zinc scalling.
to the Department, prior to 01.03.1988 as per Chapter Note 3 of Chapter 26 ash
and residue other than dross and ash of zinc containing metals or metallic
compounds applies only to the ash and residue of a kind used in industry either
for the extraction of metals or as a basis for the manufacture of chemical
compound of metal. This chapter note was subsequently amended w.e.f. 01.03.1988
by omitting the words "other than dross and ash of zinc containing metals
of metallic compounds".
prior to 01.03.1988 the said dross and ash of zinc containing metals or
metallic compound were classifiable under 7902 and subsequent to 01.03.1988 the
said product got classified under sub- heading 26.20.
also a show cause notice was issued and the Assistant Commissioner rejected the
refund claim holding that the ash cleared by the noticee (assessee) contains
metals and oxide of zinc and the same is also used for the extraction of metal
as a basis for the manufacture of chemical compounds of metal and they are
marketable and also answer of the description of chapter heading. Therefore,
they contended that the same is correctly classifiable under Chapter heading
No. 26.20 of the Central Excise Tariff Act, 1985. The assessee's appeal before
the Commissioner was also rejected and the further appeal by the assessee
before the CEGAT was allowed relying on the judgment of this Court in Indian Aluiminium
Co. Ltd. (supra).
Tribunal, following the judgment of this Court, categorically held that zinc
dross and zinc scalling are not goods, hence not excisable.
have perused the relevant records and the rules i.e. the Central Excise Rules
and of the orders passed by the respective authorities and of the CEGAT and
heard the arguments of Mr. A.K. Ganguli and Mr. J. Vellapally - learned senior
counsel appearing for the respective parties. Mr. Rajesh Kumar and Mr. Alok Yadav,
learned counsel in other appeals adopted the arguments of learned senior
learned senior counsel, appearing on behalf of the appellant submitted that sub-heading
7902.00 of the Central Excise Tariff includes waste and scrap of zinc and waste
and scrap of zinc include dross and ash. According to Mr. Ganguli, the case of
Indian Aluminium Co. Ltd. (supra) relates to aluminium dross and skimming and
the definition of aluminium waste and scrap does not include dross and skimming
and, therefore, zinc dross and skimming are covered under sub-heading No.
7902.00 of the Central Excise Tariff Act, 1985. He, therefore, prays that the
appeals filed by the appellant be allowed. He would further submit that prior
to 01.03.1988, as per Chapter Note 3 of Chapter 26 ash and residue other than
dross and ash of zinc containing metals or metallic compounds applies only to
the ash and residue of a kind used in industry either for the extraction of
metals or as a basis for the manufacture of chemical compound of metal. This
chapter note was subsequently amended w.e.f. 01.03.1988 by omitting the words
"other than dross and ash of zinc containing metals of metallic
compounds". Thus he submits that prior to 01.03.1988, the said dross and
ash of zinc containing metals or metallic compound were classifiable under 7902
and subsequent to 01.03.1988 the said product got classified under sub- heading
26.20. It was contended that a close reading of the above chapter note reveals
that the heading 26.20 covers ash and residue which contain metal or metallic
compounds and which are of kind used in industry either for the extraction of
metal or metallic compound or as basis for the manufacture of chemical compound
the argument, Mr. J. Vellapally, learned senior counsel for the respondent,
submitted that zinc dross and flux skimming were waste products in the process
of galvanisation of steel sheets and are not goods under the Central Excise
Act, 1944 and that the process of galvanisation merely involves the steel
sheets through a batch of molten zinc whereby the said sheets acquire a coat of
zinc on the surface resulting in galvanisation and that zinc dross is merely
the impurity which arises as a result of the process of galvanisation and
settle to the bottom. During the same galvanisation process, ammonium chloride
is used as a flux for cleaning the impurities from the sheets. This ammonium
chloride when mixed with molten zinc also creates some impurities in the form
of flux which floats to the surface. This flux is periodically skimmed off the
surface of the zinc and these are known as 'flux skimming'. Learned counsel
would further submit that zinc dross and flux skimming are nothing but refuse
products and these are not marketable. Learned counsel relied on the decision
of this Court being Indian Aluminium Co. Ltd. (supra) and submitted that this
Court held that aluminium dross and skimming are neither goods nor marketable commodity
and, therefore, not liable to excise duty and he, therefore, prays that the
appeals filed by the appellant be dismissed.
above pleadings and of the arguments, the following questions of law may arise
for determination of this Court.
which arises for consideration is that whether zinc dross and flux skimming
arising during galvanisation of steel sheets are goods within the meaning of
the Central Excise Act, 1944 and are liable to central excise duty as
classified by the Revenue OR Whether zinc dross and flux skimming are waste
products in the process of galvanisation of steel sheets and are not goods
under the Central Excise Act, 1944 as claimed by the assessee.
this case, the respondents are engaged in the manufacture of steel sheets and
are also galvanising steel sheets. During the process of galvanisation, zinc
dross and flux skimming come into existence. The contention of the assessee is
that these flux and zinc dross are the waste and are not marketable. The High
Court of Bombay in the case of Indian Aluminium Co. Ltd. (supra) held that
dross and skimming are neither goods nor en-products. As seen earlier, dross is
nothing but scum thrown off from metals in something; refuse and rubbish or
worthless impure metal and skimming is that which is removed or obtained from
the surface by skimming. These are, in our opinion, nothing but ashes resulting
in the process of manufacture of aluminium sheets from aluminium ingots.
Union of India vs. Delhi Cloth and General Mills Co. Ltd.
[AIR 1963 SC 791] it was held that "goods" must be something which
can ordinarily come to the market and be brought and sold and that the
"manufacture" which is liable to excise duty under the Central Excise
and Salt Act, 1944 must, therefore, be the "bringing into existence of a
new substance known to the market".
passage runs thus :- "Manufacture" implies a change but every change
is not manufacture and yet every change of an article is the result of
treatment, labour and manipulation.
something more is necessary and there must be transformation; a new and
different article must emerge having a distinctive name, character of
use." We are of the opinion that the dross and skimming are merely the
refuse, scum or rubbish through out 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 which can ordinarily come to the market to be brought and
sold. Merely because such refuse or scum may fetch some price in the market
does not justify it being called a by-product, much less an end product or a
view of the High Court of Bombay was upheld by this Court in Indian Aluminium
Co. Ltd. (supra). This Court held as under:
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.
aluminium dross and skimmings do arise during the process of manufacture. But
these are nothing but waste or rubbish which is thrown up in the course of
manufacture. The term "dross" is defined in The New Shorter Oxford
Impurities separated from metal by melting the scum which forms on the surface
of molten metal
Foreign matter mixed with anything..
Refuse, rubbish, worthless matter especially as contrasted with or separated
from something of value."
ASM Metals Reference Book (2nd Edition, 1983) produced by the American Society
for Metals defines "dross" as follows:
scum that forms on the surface of molten metals largely because of oxidation
but sometimes because of the rising of impurities to the surface." Mcgraw
Hill Dictionary of Science and Engineering (1984 Edition) defines it as:
impurity, usually an oxide, formed on the surface of molten metal." Dross
and skimmings may contain some small percentage of metal. But dross and skimmings
are not metal in the same class as waste or scrap. It may be possible to
recover some metal from such dross and skimmings. They can, therefore, be sold.
But this does not make them a marketable commodity. As learned Single Judge of
the Bombay High Court has pointed out, even rubbish can be sold.
however which is sold is not necessarily a marketable commodity as known to
commerce and which, it may be worthwhile to trade in. Learned Single Judge of
the Bombay High Court, therefore, rightly came to the conclusion that the
proviso to Rule 56A was not applicable as aluminium dross and skimmings are not
entire quantity of raw material, namely duty-paid aluminium ingots procured by the
assesses from outside was used in the manufacture of aluminium sheets. It is
nobody's case that the aluminium sheets which were manufactured by the assesses
could have been manufactured out of a lesser quantity of aluminium ingots than
what was actually used. In the process of manufacture, dross and skimmings had
to be removed in order that aluminium sheets of the requisite quality could be
manufactured. This does not mean that the entire quantity of aluminium ingots
was not used for the manufacture of aluminium sheets. In the course of
manufacture, a certain quantity of raw material may be lost because of the very
nature of the process of manufacture or some small quantity of raw material may
form 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
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:
`Waste and Scrap ' means waste and scrap metal fit only for the recovery of
metal by remelting or for use in the manufacture of chemicals, but does not
include sludge, dross, scalings, skimmings, ash and other residues;"
Tariff Item 68 which was introduced for the first time in 1975 was as follows:
All other goods, not elsewhere specified, but excluding- (a) * * * * * * * * *
* * * * * * (b) * * * * * * * * * * * * * * * (c) * * * * * * * * * * * * * * *
Explanation For the purposes of this Item,
goods which are referred to in any preceding Item in this Schedule for the
purpose of excluding such goods from the description of goods in that item
(whether such exclusion is by means of an Explanation to such Item or by words
of exclusion in the description itself or in any other manner) shall be deemed
to be goods not specified in that Item." The question in all these appeals
relates to the exigibility of aluminium dross and skimmings to excise duty by
reason of Item 68 and its Explanation read with the Explanation to Item 27. It
is contended by the appellants that the Explanation to Item 27 makes it clear that
dross and skimmings are not included in the item "Waste and Scrap of Aluminium".
Since these are expressly excluded from Item 27, these must be included in Item
68 as the Explanation to Item 68 makes it clear that goods which are referred
to in any preceding Item in the Schedule for the purpose of excluding them from
the description of goods in that Item, will have to be included in Item 68.
entire argument proceeds on the basis that aluminium dross and skimmings are
excisable goods. Otherwise the question of their inclusion in Tariff Item 68
does not arise. The appellants have emphasized the fact that aluminium dross
and skimmings are capable of being sold. Hence they must be considered as
they arise in the course of manufacture, the duty of excise can be levied on
such goods. The foundation of the arguments rests on the assumption that aluminium
dross and skimmings are marketable goods. For reasons which we have set out
earlier, it is not possible to consider aluminium dross and skimmings as
"goods" or as a commercial and marketable commodity. Dross and skimmings
are merely refuse or ashes given out in the course of manufacture, in the
process of removing impurities from the raw material. This refuse is quite
different from waste and scrap which is prime metal in its own right.
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.
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 furniture,
are expressly excluded from Tariff Item 40 which covers steel furniture and
parts. These exclusions are for the purpose of correct assessment of these
excluded articles are "goods" in their own right, and are openly
bought and sold in the market. Such excluded items, if they are not covered by
any other item, would fall in the residuary Item 68 by virtue of the
Explanation to Tariff Item 68.
Collector of Central Excise, Patna vs. Indian Tube Co. Ltd. [1995 (77) E.L.T.
21 (S.C.)], this Court has approved the reasoning of the Tribunal that the
diluted sulphuric acid, i.e., liquid which remains after user, cannot be said
to be a manufactured product and hence not liable to duty and that waste pickle
liquor is in the nature of waste product and has neither marketability nor saleability
and, therefore, not liable to duty.
Of C.Ex., Chandigarh-I vs. Markfed Vanaspati &
Allied Indus. [2003 (153) E.L.T. 491 (S.C.)], the question for consideration in
this case was whether "spent earth" is liable to excise duty or not.
Under the Tariff, prior to its amendment in 1985, it had been consistently held
that "spent earth" was not liable to duty. However, with the
enforcement of new Tariff in 1985, a conflict arose between various benches of
the Tribunal. Some benches held that "spent earth" was still not
excisable, whereas other benches held that, as it now stood included by a
specific sub-heading, it became excisable. In view of these conflicting
decisions, the matter was placed before the Larger Bench of the CEGAT which
held that "spent earth" was still not dutiable. In the appeal
preferred before this Court, this Court held the burden to prove that there is
manufacture and that what is manufactured is on the Revenue and that merely
because an item falls in a Tariff entry, manufacture must not be deemed. In para
6, this Court held as under:
However, it appears to us that the observation made in this authority are
"per incuram". In so observing, the decision of a Larger Bench of
this Court in the case of Collector of Central Excise, Indore v. Universal
Cable Ltd. Reported in [ 1995 Supp (2) SCC 465], has not been noted or
considered. In this case an argument that a good become excisable because it is
covered by Tariff Entry, has been negatived. In the case of B.P.L.
Pharmaceuticals Ltd. v. Collector of Central Excise reported in [ 1995 Supp (3)
SCC 1] it has also been held that merely because there is a change in the
Tariff Item the goods does not become excisable. Subsequently in a judgment
dated 13th February, 2003 in Civil Appeal No. 6745 of 1999 it has been held
that merely because an item falls in a Tariff Entry, it does not become
excisable unless there is manufacture and the goods is marketable. In Lal Woollen
& Silk Mills' case (supra) it has not been held that the twin test of
manufacture and marketability is not to apply. It is not possible to accept the
contention that merely because an item falls in a Tariff Entry it must be
deemed that there is manufacture. The law still remains that the burden to
prove that there is manufacture and that what is manufactured is on the
revenue. In this case, no new evidence is placed to show that there is
earth" was "earth" on which duty has been paid. It remains earth
even after the processing. Thus if duty was to be levied on it again, it would
amount to levying double duty on the same product." In Union of India vs. Ahmedabad
Electricity Co. Ltd. [2003 (158) E.L.T. 3 (S.C.)], the question which arose for
consideration was regarding exigibilty of 'cinder' to excise duty. The
respondent in the said appeals use coal as fuel for producing steam to run the
machines used in their factories to manufacture the end product. Coal is burnt
in the boilers or furnaces for producing steam. Normally, coal when it is burnt
in boilers is reduced to ash. Some part of coal does not get fully burnt
because of its low combustible quality. This unburnt or half burnt operation of
coal is left out in the boilers.
called 'cinder'. A point was posed for determination by this Court in para 7 of
this judgment which is quoted hereinbelow.
Whether inclusion of an item in the entries to the First Schedule to the Tariff
Act per se makes the item exigible to excise duty ? It is useful to reproduce
the relevant paragraphs of the judgment which read as under:
are unable to accept the proposition advanced by the learned Additional
Solicitor General. A close look at Section 3 of the Central Excise Act shows
that the words `excisable goods' have been qualified by the words "which
are produced or manufactured in India".
simply because goods find mention in one of the entries of the First Schedule
does not mean that they become liable for payment of excise duty. Goods have to
satisfy the test of being produced or manufactured in India. It is settled law that excise duty
is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subject to payment
of excise duty. There is no merit in the argument that simply because a
particular item is mentioned in the First Schedule, it becomes exigible to
excise duty. [See Hyderabad Excise, Ahmedabad, (1995) 3 SCC 23]. Therefore both
on authority and on principle, for being exigible to excise duty, excisable
goods must satisfy the test of being produced or manufactured in India. The arguments
to the contrary is rejected.
this Court had occasion to deal with a case of excise duty sought to be levied
on `spent earth'. This was in Commissioner of Central Excise, Chandigarh vs. Markfed
Vanaspati & Allied Industries [2003 (153) E.L.T. 491]. Excise duty was
being paid on "earth", `spent earth' is a residue resulting from
treatment of fatty substances. The `spent earth' remained `earth' even after
processing though its capacity to absorb was reduced. It was held that no
excise duty was leviable on `spent earth'. The facts in this case are quite
similar to the facts of the case in hand. In Markfed case `earth' was reduced
to `spent earth' with a reduced potency to absorb. In the case in hand, coal
was reduced to inferior quality coal which was no longer of use in the furnaces
in the factories, therefore, it could be reasonably be said that `cinder' i.e.
coal of reduced quality still was coal and not exigible to excise duty.
Ors. [1987 (29) E.L.T. 502 (Del.)] it was held that waste/scrap obtained not by
any process of manufacture but in the course of manufacturing the end product
was not exigible to excise duty. This was a case of manufacture of tyres, tubes
etc. In the course of manufacturing process to produce the end product i.e. tyres,
tubes, flaps etc. waste was obtained in the shape of cuttings. It was held that
this was not exigible to tax even though the waste may have some saleable
value. The essential reason for this was that there was no transformation in
the case of waste/scrap to a new and different article.
substance having a distinct name, character and use was brought about.
Manufacturing process involved treatment, labour or manipulation by the manufacturer
resulting in a new and different article. It requires a deliberate skilful
manipulation of the inputs or the raw materials. This was not so in case of
Co. Ltd. & Anr. [1995 Suppl;(2) SCC 465], it was held that waste or rubbish
which is thrown up in the course of manufacture could not be said to be a
produce of manufacture exigible to excise duty. In this case the assesses
manufactured aluminium products out of the aluminium ingots. In the process of
manufacture dross and skimmings arise and accumulate in the furnace in the
shape of ashes as a result of oxidization of metal. Aluminium dross contain an
amount of metal from which they come but they lack not only metal body but also
metal strength, formability and character. Such dross and skimmings are
distinct from scrap which is a metal of good quality.
and skimmings though obtained during process of manufacture were held to be not
exigible to excise duty at the relevant time. Since the dross and skimmings
were sold in the market it was argued that they were a marketable commodity and
should be subject to levy of excise duty. The Court observed that these were
nothing but waste or rubbish which is thrown up in the course of manufacture.
This judgment also answers the argument of the learned counsel for the
appellant based on Khandelwal Metal's case[(1985) 3 SCC 620] wherein brass
scrap produced during manufacturing of brass goods were considered to be liable
to excise. In the present case, cinder though sold for small price cannot be
said to be a marketable commodity in the sense the word "marketable"
is understood. Due to sheer necessity cinder has to be removed from the place
where it occurs because unless removed it will keep on accumulating which in
turn lead to loss of precious space. Facts noted in TISCO's case by the lower
authorities show that TISCO had been paying substantial amounts for removing
cinder to a dumping ground. From the dumping ground, it was picked up by
parties to whom it was sold. As per the averment, TISCO is spending many times
more on removing cinder than what it realizes from its sale. These are matters
of fact which have not been gone into by the authorities concerned and
therefore it is too late for us to go into all this.
the tests laid down in these judgment, it is not possible to say that cinder
satisfied the requirement of being manufactured in India." This Court, in
conclusion, held that the onus to show that particular goods on which excise
duty is sought to be levied have gone through the process of manufacture in
India is on the Revenue and that the Revenue have done nothing to discharge
opinion, this Court in Indian Aluminium Co. Ltd. (supra) has held that merely
selling does not mean dross and skimming are marketable commodity as even
rubbish can be sold and everything, however, which is sold is not necessarily a
marketable commodity as known to commerce and which, it may be worthwhile to
trade in. The issue involved in this case is governed by the past decisions of the
Tribunal and also of this Court where the Tribunal and this Court held that the
zinc dross and skimming arising as refuse during galvanisation process are not
excisable goods. The Tribunal, in our opinion, has rightly relied upon the
decision of this Court in Indian Aluminium Co. Ltd. (supra) and in view of the
above decision of the Tribunal following this Court's opinion in Indian Aluninium
Company Limited (supra), we disagree with the appellant's that zinc dross, flux
skimming and zinc scallings are goods and hence excisable.
appeals filed by the Revenue have no merits and are liable to be dismissed and
we do so accordingly. The respondent/assessee will be entitled for refund of
the duty and penalty, if any, paid by them. No costs.