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2016 (3) TMI 846 - AT - Central Excise100% EOU - Liability in terms of condition no.7 of notification no.53/97-Cus dated 3.6.1997 - Held that:- Hon’ble Supreme Court in Indian Aluminium Co. Ltd. (2006 (9) TMI 6 - SUPREME COURT OF INDIA) held that though dross and skimming do arise during the process of manufacture but these are not manufactured products. An article is not exigible to tax only because it may have some saleable value. The Supreme Court concluded that dross is not a manufactured product. Also zinc skimming and dross arising as by-products during galvanization are not manufactured excisable products. See SHRI RAM AGRO CHEMICALS (P) LTD. Versus UNION OF INDIA [2008 (10) TMI 95 - PUNJAB & HARYANA HIGH COURT] A perusal of condition no.7 of the said notification will show that customs duty is payable only when imported goods are used for the purpose of manufacture of such articles (here zinc, dross, etc.). The settled legal position is that these are not manufactured items. Hence, on this ground alone, the present impugned order confirming the duty demand will not survive. We noticed further that the various demands issued to the appellants did not specify the legal basis or reason for such demand of customs duties. They indicated that in the event of the impugned goods were found to be non-excisable, then customs duty is payable. Apparently, such conditional and provisional demands are not legally sustainable. - Decided in favour of assessee
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