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2017 (1) TMI 222 - HC - Central ExciseManufacture - Fly Ash - Whether 'fly ash' as formed during the production of electricity is a product, which falls within the meaning of manufacture as defined under Sections 2 (f) of the Central Excise Act? - Held that: - The twin tests have to be satisfied in order to bring a product within the ambit of excise duty and satisfaction of solitary test alone would not be sufficient to levy excise duty on the commodity. Therefore, mere marketability of the product alone would not be suffice to levy duty on the 'fly ash', there being no manufacturing process involved. There is no quarrel that the product 'fly ash' is a marketable product - it is clear from the averments of either party and is also not in dispute that 'fly ash' is a by-product during the production of electricity and is not the main manufactured item. Further, the 'fly ash' is not a commodity which can be used as such in the market, but it is usable only as one of the materials in the production of other products. Therefore, there being no manufacture of 'fly ash', but 'fly ash' gets formed as a by-product during the production of electricity, merely because the goods 'fly ash' finds a place in the specific or residuary entry in the schedule it cannot be termed as an excisable commodity, since it satisfies the test of marketability. - mere marketability of the product alone would not be suffice to levy duty on the 'fly ash', there being no manufacturing process involved. Whether the product 'fly ash', which is a by-product during the production/manufacture of electricity could be termed as a waste in order to attract Notification No. 89/95-CE dated 18.5.95? - Held that: - The product is capable of being bought and sold, whereby marketability of the product is such that it has a value in the market. Once a product is said to have a value in the market to enable it to be sold for the purpose of manufacture of various commodities, it cannot be termed as waste or scrap. - Such being the case, learned single Judge has misled himself into giving a finding that the by-product 'fly ash', which is generated during the production of electricity is a waste or scrap and, thereby, Notification No.89/95-CE dated 18.5.95 would stand attracted. The said finding of the learned single Judge is per se erroneous and is liable to be interfered with. The primary issue is answered in favor of the respondent and against the appellants, the incidental issue is answered in favor of the appellants and against the respondent - appeal dismissed - decided partly in favor of appellant.
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