Aluminium Dross and Skimmings are Manufactured Goods and Excisable

· Revenue Follow Tribunal Judgement

[CBEC Instruction F. No. 17/02/2009-CX.1 (Pt) dated 12^th November 2014]

Subject - Judgment of the Larger Bench of Tribunal on Aluminum dross and skimming.

I am directed to bring judgment of Hon’ble Tribunal [Larger Bench] in case of M/s Hindalco Industries Ltd Vs Commissioner of Central Excise, Belapur, Mumbai - III and Nagpur [2014-TIOL-1762-CESTAT-Mum-LB]. In this case an important question of law was framed and answered. The reference made to the Larger Bench as defined in paragraph 1 and the answer to the reference as given in paragraph 7 of the judgment is reproduced below for ease of reference.

2. “The reference made to the Larger Bench reads as follows:

(a) Whether Aluminium Dross and Skimmings or similar Non-ferrous Metal Dross and Skimmings, which arise in the process of manufacture of aluminium / Non-ferrous metal products can be considered as a ‘manufactured goods' and hence excisable for the period post 10.05.2008 in view of the Explanation added to Section 2(d) of the Central Excise Act, 1944?

Or

(b) Notwithstanding the Explanation to Section 2(d), Aluminium Dross Skimmings or other Non-ferrous metal dross and Skimmings cannot be considered as ‘manufactured products' and hence, not liable to excise duty? ”

3. “In the factual and legal matrix discussed above, we answer the reference made to us as follows:-

Aluminium dross and skimmings and similar non-ferrous metal dross and skimmings which arise as a by-product in the process of manufacture of aluminium / non-ferrous metal products are manufactured goods and hence excisable w.e.f. 10.05.2008 in view of the explanation added to Section 2(d) of the Central Excise Act, 1944.”

4. This is an important judgment and sets out the correct legal position in the matter. Field officers are directed to follow the same in cases covered by similar facts. Difficulty if any in implementing this instruction may be brought to the notice of the Board.