2022 (12) TMI 1295 - AT - Central Excise

Process amounting to manufacture or not? - whether aluminium dross and skimming arising in the course of manufacture is excisable after 10th May 2008? - HELD THAT - It is seen from the decision of the Hon ble High Court of Bombay in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL THE COMMISSIONER OF CENTRAL EXCISE 2014 (12) TMI 657 - BOMBAY HIGH COURT that dutiability of the impugned goods which had been held by the Tribunal to be excisable even after the amendment inserting Explanation in section 2(d) of Central Excise Act 1944 with effect from 10th May 2008 did not find favour in the light of several decisions. In the light of the decision of the Hon ble High Court of Bombay in their own matter on the very same impugned goods in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL THE COMMISSIONER OF CENTRAL EXCISE 2014 (12) TMI 657 - BOMBAY HIGH COURT which was affirmed by the Hon ble Supreme Court in UNION OF INDIA VERSUS HINDALCO INDUSTRIES LIMITED 2019 (3) TMI 1933 - SC ORDER holding that nothing survives for consideration in these Special Leave Petitions and the Civil Appeal. The Special Leave Petitions and the Civil Appeal are dismissed. The impugned orders do not survive and accordingly are set aside to allow the appeals - Appeal allowed.

Summary

Issues:
Challenge to duty recovery orders for 'aluminium dross and skimming' during manufacture of 'aluminium coil/sheets' under Central Excise Act, 1944.

Analysis:
The appeals by M/s Hindalco Industries Ltd challenged duty recovery orders for 'aluminium dross and skimming' during the process of manufacturing 'aluminium coil/sheets'. The duty recovery was ordered under the Central Excise Act, 1944, for various periods and units. The appellant contended that the issue of excisability of the goods post 10th May 2008 was decided by the Hon'ble High Court of Bombay in their favor, overruling the Tribunal's decision. The Tribunal's decision was based on the amendment in section 2(d) of the Central Excise Act, 1944. The High Court held that the Tribunal's decision was not in line with Supreme Court judgments, emphasizing that the conditions under Section 2(d) and Section 2(f) must be conjunctively satisfied for excise duty imposition. The Tribunal's attempt to justify excisability based on marketability and process analysis was deemed contrary to Supreme Court rulings.

The High Court's decision in Hindalco Industries Ltd's favor was affirmed by the Supreme Court, leading to the dismissal of Special Leave Petitions and Civil Appeal. Consequently, the impugned duty recovery orders were set aside, allowing the appeals. The Tribunal's decision was deemed perverse and vitiated by an error of law, as it disregarded binding Supreme Court judgments. The High Court's decision clarified the excisability criteria and emphasized the importance of following established legal precedents. The final judgment highlighted the significance of Supreme Court rulings in determining excisability under the Central Excise Act, 1944, and upheld the appellant's challenge to the duty recovery orders for 'aluminium dross and skimming'.