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2019 (1) TMI 1157 - CESTAT NEW DELHIBy-product or manufactured item? - fly ash - Department observed that the appellant has not paid Central Excise duty on the fly ash alleging it to be a by-product, cleared during the period from March, 2011 to December 2011 - Held that:- Since beginning the stand of appellant is that fly-ash is not manufactured by them, as it generates as a residue/ waste, during the generation of electricity. For excisability, the goods have to satisfy 2 conditions i.e. of manufacture and marketability. Though fly-ash has admittedly been sold by the appellant, thus, fulfilling one condition of marketability but it does not qualify the definition of manufacture. In terms of Section 2 (f) of Central Excise Act Hon’ble High Court of Madras in the case of Central Board of Excise and Customs, vs. Mettur Power Thermal Station [2017 (1) TMI 222 - MADRAS HIGH COURT] has held that the fly-ash since is formed during the production of electricity by burning pulverized coal fly-ash cannot be said to be manufacture merely because fly-ash was specific or residuary entry in schedule, it cannot be termed as excisable commodity just because, it satisfies the test of marketability. The statute levy excise duty on the goods which are manufactured and have marketability. Fly-ash in the given circumstances is qualifying only one of the conditions i.e. of marketability and is not qualifying the condition of manufacture, it being compulsorily generated during the process of generation of electricity from lignite and the appellant is the manufacturer of lignite. In the given circumstances, fly-ash is not even the by-product. Appeal allowed - decided in favor of appellant.
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