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M/s. The Madras Aluminium Co. Ltd. Versus CCE & ST, Salem

Levy of duty on aluminium dross - whether Aluminium Dross emerging as product is excisable or otherwise - Held that:- merely selling does not mean dross and skimming are marketable commodity as even rubbish can be sold. Everything which is sold is not necessarily a marketable commodity as known to commerce and which it may be worthwhile to trade in. - Issue has already been settled by the Hon’ble Apex Court judgement in the case of Grasim Industries Ltd. Vs. UOI [2011 (10) TMI 2 - SUPREME COURT .....

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. - E/S/41208/2014 in E/40962/2014 - Final Order No. 40546 / 2015 - Dated:- 12-5-2015 - Hon ble Shri R. Periasami And Hon ble Shri P. K. Choudhary,JJ. For the Applicants : MS. Swetha Giridhar, Adv. For the Respondent : Shri K.P. Muralidharan, AC (AR) ORDER Per: R. Periasami The issue involved in this appeal is whether Aluminium Dross emerging as product is excisable or otherwise. As the issue lies in a narrow compass, after dispensing with the stay application, the main appeal itself is taken up .....

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he Hon ble Apex Court judgement in the case of Grasim Industries Ltd. Vs. UOI 2011 (273) ELT 10 SC. Hon ble Bombay High Court in the case of Hindalco Industries Ltd. Vs. UOI 2015 (315) ELT 10 (Bom.) on the similar issue allowed the appeal. The Hon ble High Court has set aside the Tribunal s order by relying Hon ble Apex Court decision in the case of Indian Aluminium & Co. And Grasim Industries Ltd. (supra). The relevant portion of the said order is reproduced as under:- 20. The Hon ble Supre .....

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Thereafter, the Hon ble Supreme Court was required to consider this issue and as already referred by us in the case of Commissioner of Central Excise v. Indian Aluminium Co. Ltd. reported in 2006 (203) E.L.T. 3 (S.C.). Finally, in the case of Grasim Industries Ltd. (supra), the Hon ble Supreme Court referred to all the amendments including the insertion of the Explanation and on noticing the issue before it, proceeded to hold as under: 7. We have heard the learned counsel for the parties. In the .....

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these M.S. Scrap and Iron Scrap were excisable goods under Section 2(d) of the Act falling under the Chapter Heading 72.04 in the Schedule to the Tariff Act read with Note 8(a) to Section XV of the Tariff Act as metal scrap and waste. We are of the opinion that Section Note has very limited purpose of extending coverage to the particular items to the relevant tariff entry in the Schedule for determining the applicable rate of duty and it cannot be readily construed to have any deeming effect in .....

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It is clear that the legislature realised that it was not possible to put in an exhaustive list of various processes but that some methodology was required for declaring that a particular process amounted to manufacture. The language of the amended Section 2(f) indicates that what is required is not just specification of the goods but a specification of the process and a declaration that the same amounts to manufacture. Of course, the specification must be in relation to any goods. 23. We are i .....

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process is indicated in the tariff entry, without specifying that the same amounts to manufacture, then the indication of the process is merely for the purposes of identifying the product and the rate which is applicable to that product. In other words, for a deeming provision to come into play it must be specifically stated that a particular process amounts to manufacture. In the absence of it being so specified the commodity would not become excisable merely because a separate tariff item exis .....

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inates (P) Ltd. v. CCE (1995) 3 SCC 23 = 1995 (76) E.L.T. 241 (S.C.), CCE v. Wimco Ltd. (2007) 8 SCC 412 = 2007 (217) E.L.T. 3 (S.C.)]. Therefore, both on authority and on principle, for being excisable to excise duty, goods must satisfy the test of being produced or manufactured in India. In our opinion, he charging Section 3 of the Act comes into play only when the goods are excisable goods under Section 2(d) of the Act falling under any of the tariff entry in the Schedule to the Tariff Act an .....

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es bringing some kind of change to the raw material at various stages by different operations. The process in manufacture must have the effect of bringing change or transformation in the raw material and this should also lead to creation of any new or distinct and excisable product. The process in relation to manufacture means a process which is so integrally connected to the manufacturing of the end product without which, the manufacture of the end product would be impossible or commercially in .....

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ge in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. 14. In the present case, it is clear that the process of repair and maintenance of the machinery of the cement manufacturing plant, in which M.S. scrap and Iron scrap arise, has no contribution or effect on the process of manufacturing of the cement, which is the excisable end product, as since welding electrodes, mild steel, cut .....

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. Therefore, the M.S. scrap and Iron scrap cannot be said to be a by-product of the final product. At the best, it is the by-product of the repairing process which uses welding electrodes, mild steel, cutting tools, M.S. Angles, M.S. Channels, M.S. Beams etc. 21. We do not see how, in the light of these authoritative pronouncements of the Hon ble Supreme Court, can the Tribunal take a different view. When the Hon ble Supreme Court holds and as in Grasim Industries Ltd. (supra) that the condition .....

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