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TMI Blog1997 (8) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... are liable to Central Excise duty. 2. The appellants are manufacturer of steel sheets. They are also galvanising steel sheets. In the process of galvanisation, zinc dross and flux skimmings arise. 3. Ld. Counsel appearing on behalf of the appellants submits that zinc dross and flux skimmings are waste products in the process of galvanisation of steel sheets and are not goods under the Central Excise Act, 1944. The process of galvanisation merely involves the steel sheets through a bath of molten zinc whereby the said sheets acquire a coat of zinc on the surface resulting in galvanisation. Zinc dross is merely the impurity which arises as a result of the process of galvanisation and settle to the bottom. During the same galvani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are also galvanising steel sheets. During the process of galvanisation, zinc dross and flux skimmings come into existence. The contention of the appellants is that these flux and zinc dross are the waste and are not marketable. 6. The Hon'ble High Court of Bombay in the case of Indian Aluminium Co. Ltd. and Another v. A.K. Bandyopadhyay and Others reported in 1980 (6) E.L.T. 146 (Bom.) held that "Dross and skimmings are neither goods nor end-products". The Hon'ble High Court held as under : "22. It is difficult to come to the conclusion that dross and skimmings are "goods" and the contention to the contrary urged on behalf of the petitioner is not entirely devoid of substance. As stated earlier, dross is nothing but "scum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that "Dross and skimmings are merely the refuse, scum or rubbish thrown out in the process of manufacture of aluminium sheets and cannot be said the result of treatment, labour or manipulation whereby a new and different article emerges with a distinctive name, character or use which can ordinarily come to the market to be bought and sold. Merely because such refuse or scum may fetch some price in the market does not justify it being called a by-product, much less and end-product or a finished product". 8. This view of the High Court of Bombay was upheld by the Hon'ble Supreme Court in the case of UOI v. Indian Aluminium Co. Ltd., reported in 1995 (77) E.L.T. 268 (S.C.). The Hon'ble Supreme Court held as under : '13. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has pointed out, even rubbish can be sold. Everything, however which is sold is not necessarily a marketable commodity as known to commerce and which, it may be worthwhile to trade in. Learned Single Judge of the Bombay High Court, therefore, rightly came to the conclusion that the proviso to Rule 56A was not applicable as aluminium dross and skimmings are not excisable goods. 14. The entire quantity of raw material, namely duty-paid aluminium ingots procured by the assessees from outside was used in the manufacture of aluminium sheets. It is nobody's case that the aluminium sheets which were manufactured by the assessees could have been manufactured out of a lesser quantity of aluminium ingots than what was actually used. In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef, and not the entire quantity which was put in the process of manufacture. This Court held that it was the duty paid on the input material that was relevant and not the duty referable to the ultimate component of the final product. It said : "So far as the manufacturer is concerned he has used copper and copper alloys of a particular quantity in the manufacture of pipes and tubes. The `manufacturing loss' forms part of the raw material `used' in the manufacture though not reflected in the final product. The relief, as we understand the notification, that has to be given to the manufacturer was in respect of the duty already paid on the raw material used in the manufacture of the final product. That is, the relief has to be given to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture and that it is not possible to use a lesser quantum of ethylene glycol for producing a given quantity of polyester fibre. The appellants had not used excess ethylene glycol want only to produce methanol. They were entitled to full credit for the duty paid on ethylene glycol. This Court also approved of the decision of the Bombay High Court in the case of Indian Aluminium Co. Ltd. & Anr. v. A.K. Bandyopadhyay & Ors. [1980 (6) E.L.T. 146 (Bom.)] from which judgment the present appeal is filed. 17. In the premises, we agree with the reasoning and conclusion of the learned Single Judge of the Bombay High Court from whose judgment an appeal was dismissed by a Division Bench of the Bombay High Court and which judgment is und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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