CCE Vs. S.T.L. EXPORTS LTD.

JUDGEMENT

(1.) IN these two appeals, filed by Revenue, the issue involved is whether Zinc Dross/Ash are leviable to Excise duty.

(2.) MRS . Charul Baranwal, learned SDR, submitted that the Respondents M/s. STL Exports Ltd, a 100% Export Orient Undertaking, galvanise black M.S. pipes; that during the process of galvanization, remnants in the form of Zinc dross/Scaling come into existence which contain less than 20% Zinc contents; that the Commissioner (Appeals) under the impugned Order has held that Zinc dross are not chargeable to Central Excise duty relying upon the decision in the case of Tata Iron & Steel Co. Ltd. v. CCE 2001 (135) ELT 1142 (Tribunal) and UOI v. Indian Aluminium Co. Ltd. . She, further, submitted that Zinc which is left in electrolytic process is a residue recovered as Zinc dross and it is generally used for recovery of chemical and as such is classifiable under Chapter 79 of the Schedule to the Central Excise Tariff Act; that Zinc dross and Zinc Ash are sold by the Respondents which goes to show that these are recognized products and known to the market with different names; that the Commissioner (Appeals) has also relied upon the decision in the case of National Steel Industries Ltd. v. CCE, Indore against which the Revenue has filed a Civil appeal in the Supreme Court which has been admitted as Civil appeal No. 5262/2003.

(3.) WE have considered the submissions of both the sides. The Apex Court has considered the question of excisability of Zinc dross and scaling arisen during galvanization of steel sheets in the case of TISCO Ltd. (supra). After referring to various decisions including the decision in the case of UOI v. Indian Aluminium. Co. Ltd. (supra) and UOI v. Ahemedabad Electricity Co. Ltd. , the Hon'ble Supreme Court has held that "the dross and skimming are merely the refuse, scum or rubbish through out in the process of manufacture of aluminium sheets, and therefore, cannot be said the result of treatment, labour or manipulation whereby a new and different article emerges with a distinctive name, character, or use which can ordinarily come to the market to be bought and sold. Merely because such refuse or scum may fetch some price in the market does not justify it being called a by -product much less amend product - or a finished product." The Supreme Court has, therefore, disagreed with the Revenue's contention that Zinc dross, flux, skimming and Zinc scaling are goods and hence excisable. Following the ratio of the Supreme Court's decision we reject both the appeals, filed by the Revenue.