General Engg. Works Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. the dispute in this appeal is whether lead ash is excisable or not.the appellants have contested that the lead ash arise in the process of galvanisation of iron and steel wire. in the process of galvanisation, the lead ash appears on the surface or on the corners of bath of lead and collected as such. the admitted position is that the lead ash is sometimes sold in the market. the department was of the view that the lead ash is a by-product which arises in the process of galvanisation and since it was a product, therefore it was goods and since it was marketable it was excisable. the contention of the appellants was that the lead ash is waste and was not a commodity which can be termed as excisable commodity. the lower authorities however held that lead ash is excisable and accordingly confirmed the demand.2. arguing the case, shri k.k. anand, ld. advocate submits that lead ash is neither a product manufactured nor is it excisable. he submits that the lead ash arises in the process of galvanisation of steel wires and is only waste and scrap of lead. he submits that since it is a waste and scrap, therefore the input is covered by the decision of the apex court in the case of u.o.i. v. indian aluminium co. limited [1995 (77) e.l.t. 268 (s.c.)]. he submits that in this case also there was dross and skimmings which came on the bath and is removed as froth. he submits that the same situation happens in the present case also, therefore, he submits that the issue is fully covered by the above decision of the apex court and prays that the appeal may be allowed.3. shri m.p. singh, ld. jdr submits that for being goods marketability is one of the tests. he submits that it is a fact that lead ash is marketable. he submits that lead ash is a by-product and since it is a product which comes into existence in the process of manufacture and since it is marketable, it is goods for the purpose of levy of duty. he reiterates the findings of the authorities below.4. we have carefully considered the rival submissions. we find that the lead ash is generated in the process of galvanisation of iron and steel wires. the admitted position is that it is collected from the surface and corners of the bath. thus the process of manufacture and its coming on the surface and corners shows that it is in the form of froth or dross or skimmings. since it is in the form of waste even if it is sold in the market, it does not make itself goods for levy of central excise duty as was held by the apex court in the case of indian aluminium co.limited cited above. following the ratio of this judgment, we hold that the lead ash is not goods for the purpose of levy of central excise duty.

Judgment:
1. The dispute in this appeal is whether lead ash is excisable or not.

The appellants have contested that the lead ash arise in the process of galvanisation of iron and steel wire. In the process of galvanisation, the lead ash appears on the surface or on the corners of bath of lead and collected as such. The admitted position is that the lead ash is sometimes sold in the market. The department was of the view that the lead ash is a by-product which arises in the process of galvanisation and since it was a product, therefore it was goods and since it was marketable it was excisable. The contention of the appellants was that the lead ash is waste and was not a commodity which can be termed as excisable commodity. The lower authorities however held that lead ash is excisable and accordingly confirmed the demand.

2. Arguing the case, Shri K.K. Anand, ld. Advocate submits that lead ash is neither a product manufactured nor is it excisable. He submits that the lead ash arises in the process of galvanisation of steel wires and is only waste and scrap of lead. He submits that since it is a waste and scrap, therefore the input is covered by the decision of the Apex Court in the case of U.O.I. v. Indian Aluminium Co. Limited [1995 (77) E.L.T. 268 (S.C.)]. He submits that in this case also there was dross and skimmings which came on the bath and is removed as froth. He submits that the same situation happens in the present case also, therefore, he submits that the issue is fully covered by the above decision of the Apex Court and prays that the appeal may be allowed.

3. Shri M.P. Singh, ld. JDR submits that for being goods marketability is one of the tests. He submits that it is a fact that lead ash is marketable. He submits that lead ash is a by-product and since it is a product which comes into existence in the process of manufacture and since it is marketable, it is goods for the purpose of levy of duty. He reiterates the findings of the authorities below.

4. We have carefully considered the rival submissions. We find that the lead ash is generated in the process of galvanisation of iron and steel wires. The admitted position is that it is collected from the surface and corners of the bath. Thus the process of manufacture and its coming on the surface and corners shows that it is in the form of froth or dross or skimmings. Since it is in the form of waste even if it is sold in the market, it does not make itself goods for levy of Central Excise duty as was held by the Apex Court in the case of Indian Aluminium Co.

Limited cited above. Following the ratio of this judgment, we hold that the lead ash is not goods for the purpose of levy of Central Excise duty.