TMI Blog2023 (8) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tariff Schedule that would change the colour of the controversy. That would enable the Tribunal to then hold that the earlier Judgments and in the case of this very Assessee are no longer good law - The said decision has been affirmed by the Hon ble Apex Court [ 2019 (3) TMI 1933 - SC ORDER ] wherein it has been held that dross and skimming of aluminium, zinc or other non-ferrous metal emerging during manufacture of aluminium/non-ferrous sheets/foils and other products and sold by assessee were not manufactured goods. In the case of UOI v. Indian Aluminium Co. [ 1995 (4) TMI 62 - SUPREME COURT ], the Hon ble Apex Court has an occasion to deal the issue - Further, in the case of Ahmedabad Electricity Co.Ltd. [ 2003 (10) TMI 47 - SUPREME COURT ], the Hon ble Apex Court has occasion to deal such issue - In view of the above judicial pronouncements, it is held that the flue gas which is generated in the manufacture of coke is not manufactured product, therefore, duty is not payable. Further, it is noted that merely this flue gas has been sold by the appellant in terms of the agreement with TPCL, it does not make it marketable as held by the Hon ble Apex Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bustion of volatile matter evolved from coal by admitting air into the chamber. c) Primary air is maintained at below stoichiometric level to control burning of coal. d) During such carbonization process lean gas is generated inevitably in the oven chamber due to partial combustion of volatile matters. e) Since the lean gas cannot be emitted into the atmosphere as per environmental norms, the same is directed below the oven side walls for further combustion by admitting secondary air. f) Resultantly, hot flue gas is generated from the oven at a temperature ranging from 1100 degree Celsius 1150 degree Celsius which is free from volatile and toxic matter. 3. Revenue is of the view that the flue gas generated and cleared to TPCL by classifying the flue gas as Nitrogen . As appellant is engaged in the manufacture of flue gas, a show cause notice was issued to the appellant by invoking extended period of limitation alleging that as per the agreement with TPCL flue gas is being sold, hence, it can be said to marketable since it is capable of being bought and sold. The Appellant contested the matter, but the adjudicating authority confirms the demand in hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on the decision of this Tribunal in the case of Himadri Speciality Chemical Ltd. v. CGST Excise, Howrah [2020- TIOL-214-CESTAT-KOL], which has been affirmed by the Hon ble High Court [2022-TIOL-1034-HC-KOL-CX], Vanati Organics Ltd. v. CCE, Raigad [2007 (209) ELT 145 (Tri.-Mumbai)] and Philips Carbon Black Ltd. v. CCE, Bolpur [1999 (111) ELT 835 (CEGAT-Kolkata)]. 6. He further submits that flue gas is not marketable. It is his submission that every item bought and sold does not become marketable. Test of marketability implies regular market for a product. He relied on the decision of the Hon ble Supreme Court in the case of Hindustan Zinc Ltd. v. CCE, Jaipur [2005 (181) ELT 170 (SC)]. 7. It is his submission that the revenue has merely relied upon the Flue Gas Agreement to state that flue gas is marketable without conducting any market survey and placing of record a proof to such extent. He also relied on the decision of Hon ble Supreme Court in the case of CCE, Patna v. Tata Iron Steel Co.Ltd. [2004 (165) ELT 386 (SC)]. He further submitted that in the impugned order the adjudicating authority has relied upon various online dictionaries and the information available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sides, we find that in this case it is fact that the flue gas is generated during the course of manufacturing of coke. It is not manufactured by the appellant, but it is a waste gas which arises inevitably without beyond the control of the appellant. In that circumstances it is to be seen that the flue gas which was not intended to be produced by the appellant can fulfill the test of manufacture or not. 15. The issue has been examined by the Hon ble Bombay High Court in the case of Hindalco Industries Ltd. (supra), wherein the Hon ble High Court observed as under:- 22. . Waste and scrap emerge as a by-product in the course of manufacture of other products. The whole purpose of making these observations is to justify the conclusion that because there is a reference to these items in the Tariff Entry or the Tariff Schedule that would change the colour of the controversy. That would enable the Tribunal to then hold that the earlier Judgments and in the case of this very Assessee are no longer good law. However, we do not see how the decision in the case of Grasim Industries Ltd. (supra) and particularly the above reproduced paragraphs could have been brushed aside b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of coal is left out in the boilers. It is called cinder . Though the respondents are engaged in manufacturing different end products, one thing is common between them and that is that they all use coal as a fuel. In these set of facts, the Hon ble Apex Court observed as under:- 23 In the case in hand also . coal which leads to production of cinder is not used as a raw material for the end product. It is being used only for ancillary purpose that is as a fuel. Therefore, irrespective of the fact whether any manufacture is involved in production of cinder it should be held to be out of the tax net for the reason that it is not a raw material for the end product. 24 In producing cinder , there . is no manufacturing process involved. Coal is simply burnt as fuel to produce steam. Coal is not tampered with, manipulated or transformed into the end product. For purposes of manufacture the raw material should ultimately get a new identity by virtue of the manufacturing process either on its own or in conjnuction or combination with other raw materials. Since coal is not a raw material for the end product in all the cases before us, the question of getting a new identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it marketable as held by the Hon ble Apex Court in the case of Hindustan Zinc Ltd. (supra), wherein it has been held that burden of proof that the product is marketable is on the revenue to prove that the flue gas in question is a marketable product. There is no market enquiry was conducted by the revenue in this case to hold that the gas in question is marketable and freely be sold, therefore, we hold that revenue has failed to prove the test of marketability also. 19. We further take note of the fact that merely because it is having contents more than 80% v/v, it cannot be said that the said gas is Nitrogen gas by applying rule 3(b) of the General Rules of Interpretation without any evidence. In the absence of any evidence produced on record that the flue gas can be sold in the market as Nitrogen and the same cannot be classified as Nitrogen. 20. In view of the above observations, we hold that the flue gas generated during the course of manufacture metallurgical coke, is not a manufactured product and is also not marketable. The same cannot be classified as Nitrogen. In view of this, we set aside the impugned order and allow the appeal with consequential relief, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
