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2005 (4) TMI 233 - CESTAT, CHENNAIExcisability - Residue in the form of "red mud" emerges - Manufacture of Aluminium from Bauxite - Duty demand - Penalty - HELD THAT:- It appears that wet red mud emerges as residue during the course of manufacture of Aluminium from Bauxite and the same is dried in the open yard to obtain the commodity in question. But as held by the Apex Court time and again vide, for instance, CCE v. Markfed Vanaspati & Allied Industries [1999 (11) TMI 230 - CEGAT, NEW DELHI] any goods does not become excisable merely because it falls under a tariff entry. It must be a "manufactured" product known to the trade as a marketable commodity. The test of manufacture was not satisfied in respect of red mud. Hence, in our view, it is not necessary to examine the question whether red mud was marketable or not. The Tribunal's Larger Bench decision in the case of Markfed Vanaspati & Allied Industries (supra) appears to be supportive of the appellants' case. In that case, 'spent earth' which emerged during the course of refining and bleaching of edible oils was found not to be a 'manufactured' product. The Larger Bench held that, even if a commodity found mention in a specific Heading/sub-heading of the CETA Schedule, it would not be exigible to levy of excise duty if it did not satisfy the test of 'manufacture'. The Civil Appeal filed in the Supreme Court by the department against this decision of the Tribunal's Larger Bench was withdrawn, whereby the Larger Bench decision stood accepted by the Revenue. Thus, we hold that red mud which emerged during the course of manufacture of Aluminium from Bauxite in the appellants' factory during the period of dispute was not excisable and hence the demand of duty is not sustainable. In the result, the impugned orders are set aside and these appeals are allowed.
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