Indian Tax Solutions

Zinc dross, flux skimming out of excise duty: SC

New Delhi, Oct. 15 (PTI):- The
Supreme Court has held that Zinc dross and Flux skimming produced during the
galvanisation process of aluminium cannot be termed as goods to be brought under
the ambit of excise duty.
Holding that though dross and skimming may have some saleable value, the apex
court said it would not render it as a 'manufactured product' for imposing duty.
A bench of Justice S B Sinha and Justice Dalveer Bhandari concurred with the
findings of a tribunal that dross and skimming were not amenable to duty.
As a result of oxidation of aluminium sheets a thin layer/film is formed, which
is removed by the process of skimming and the second layer so removed is called
dross.
The verdict was pronounced by dismissing the petition by Commissioner of Central
Excise, challenging an order passed by the Customs, Excise and Service Tax
Appellate Tribunal (CESTAT).
In its ruling, the bench referred to earlier apex court judgements in which it
was settled that merely selling does not mean that dross and skimming were
marketable commodities.
The court had referred to the verdict in which it was observed that "even
rubbish can be sold and everything which is sold is, however, not necessarily a
marketable commodity as known to commerce."
The Central Excise had contended that dross and skimming were not only
marketable but in fact contain high percentage of aluminium and in some cases up
to 78 per cent and so will come under the purview of the term goods for levying

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duty.
However, the Indian Aluminium Company Ltd had maintained that dross was waste
material, not marketable and it did not come under the ambit of manufactured
item.

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