MSL INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The short question arising for consideration in this case is regarding the classification of what is described by the assessee as "Zinc dross and ash" and considered by the Revenue as "Zinc alloy". The assessee wants the goods to be classified as "ash and residues (other than from the manufacture of iron or steel) containing metals or metal compounds" under sub -heading 2620.00 (with a duty rate of 10% ad valorem) of the Central Excise Tariff Schedule, against the Revenue's claim to have it classified as "Zinc alloy" under SH 7901.20 (duty rate 15%) of the said Schedule. The adjudicating authority, by order dated 23 -2 -2002 passed in a remanded proceedings, classified the goods under SH 7901.20 and confirmed the demand of differential amount (Rs. 41,168.00) of duty against the assessee for the period December, 1993 to May, 1994. Hence this appeal. Heard both the sides.

(2.) Learned Counsel for the appellants submitted that they were not manufacturing Zinc and articles thereof and therefore the question of any "Zinc alloy" or Zinc waste and scrap arising in the course of manufacture of their products did not arise. The goods in question had arisen during the galvanization of C.R. Strips. The Chemical Test Report did not specifically say that the sample was an alloy of Zinc. The department had not even raised In the Test Memo any query as to whether the sample was an alloy of Zinc. The Test Report did not support the Commissioner's finding that the goods was a Zinc alloy. The process of manufacture of an alloy involved intentional addition of metals to improve properties of the alloy. There was no intentional addition of any metal in the instant case. The Counsel further submitted that the Commissioner had not fully complied with the directions contained in the Tribunal's remand order. He also claimed that the classification issue was covered in the appellants' favour by the Tribunal's decision in CC v. Metaltone (Gujarat) Pvt. Ltd. [1999 (107) E.L.T. 722].

(3.) Learned DR submitted that the Tribunal had, by its remand order, given liberty to the Commissioner to read judicate the case on the basis of the test report or otherwise. The Commissioner accordingly determined the classification of the goods on the basis of the Test Report. The DR conceded that no fresh basis was shown in the Commissioner's de novo order, for classifying the goods under SH 7901.20. However, he contested the Counsel's statement that no metal had been intentionally added for producing the goods in question. He would say that lead and aluminium had been intentionally added for generating Zinc alloy.