2019 (2) TMI 554 – CESTAT NEW DELHI – TMI – Levy of duty – residual waste namely, ‘fly ash’ – process of manufacture not taking place – benefit of N/N. 89/95-CE dated 18.5.95 denied – Held that:- The matter is no longer res integra as it has already been decided by Hon’ble High Court of Madras in the case of Mettur Thermal Power Station vs. CBE & C New Delhi [2015 (9) TMI 152 – MADRAS HIGH COURT], where it was held that the commodity ‘fly ash’ cannot be subjected to levy of excise duty because it is not an item of goods which has been subjected to process of manufacture, it may not be necessary for this Court to delve upon any other related issues – demand set aside – appeal dismissed – decided against Revenue. – Excise Appeal No. 52818 of 2018 – FINAL ORDER No.50099/2019 – Dated:- 9-1-2019 – Mr. C L Mahar, Member (Technical) And Ms. Rachna Gupta, Member (Judicial) Shri R K Mishra, AR for the Appellants Shri Anurag Kapur, Advocate for the Respondent ORDER Per C L Mahar: Brief facts of
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classifiable under Chapter heading 26219000 of Central Excise Tariff Act, 1995 under the residual entry and therefore, it is alleged that the respondent assessee should have cleared the fly ash on payment of duty. Accordingly, a show cause notice dated 7.12.2016 came to be issued to the party wherein Central Excise duty of ₹ 48,12,210/- has been demanded under section 11A of the Central Excise Act, 1944. Interest and penal provisions have also been invoked. The matter has been adjudicated vide Order-in-Original dated 28.3.2017 wherein all the charges of the show cause notice have been confirmed by the learned adjudicating authority. The party has approached the Commissioner (Appeals) against the Order-in-Original and the Commissioner (Appeals) vide impugned Order-in-Appeal No. BHO-EXCUS-001-APP-381-17-18 dated 27.10.2017 has allowed the appeal of the respondent-assessee. The learned Commissioner (Appeals) has primarily decided the issue following the judgment of Hon ble Supreme C
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ing the combustion of coal as a fuel to produce steam for generation of electricity. Coal is not tampered with, manipulated or transformed into any end product; the same is burnt to produce steam which is used for generation of electricity. Thus, it is submitted that fly ash emerged during the combustion of coal, cannot be said to have arisen out of any manufacturing process. Since generation of fly ash does not satisfy the test of manufacture which is sine qua non for levy of excise duty under Section 3 of the Excise Act, Central Excise duty cannot be levied on such residual product. This submission is in line with the observations made by the Hon ble Supreme Court in the case of Union of India vs. Ahmedabad Electricity Co. Ltd. [ 2003 (158) ELY 3 (SC) where issue was regarding excisability of Cinder which is unburnt/ partly burnt pieces of coal not capable of producing flame and Hon ble Supreme Court has held that the undue cannot be termed as a manufactured product. 4. An identical
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manufacture; marketability of a product alone is not sufficient for levy of duty. 6. Thus, the emphasis laid by the department in its appeal upon explanation to Section 2(d) of the Excise Act, on the aspect of marketability to bring fly ash within the ambit of excisable goods , alone is not sufficient and such argument is not legally sustainable. 7. We have also heard the learned Departmental Representative who has reiterated the grounds given in the appeal. 8. Having heard both the sides, we are of the view that the matter is no longer res integra as it has already been decided by Hon ble High Court of Madras in the case of Mettur Thermal Power Station vs. CBE & C New Delhi [2016 (335) ELT 29 (Mad)]. Relevant extract of the same are reproduced hereinbelow: 24. It is not in dispute that electricity has been specified in the First Schedule of the Central Excise Tariff under Heading 2716 00 00, but it is not subjected to a duty of excise since under the rate column the duty of excis
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ng the course of manufacture of electricity, which is an excisable good chargeable to nil rate of duty. 25. However, as already this Court held that the commodity fly ash cannot be subjected to levy of excise duty because it is not an item of goods which has been subjected to process of manufacture, it may not be necessary for this Court to delve upon any other related issues. Accordingly, the issue is answered, holding that the good fly ash does not involve any manufacturing activity and it does not fall under the purview of excisable good so as to attract levy of excise duty. 9. Since the facts involved in the present case are identical to and stand decided by Hon ble High Court of Madras in the case of Mettur Thermal Power Station vs. CBE & C New Delhi (supra), we follow the same and decide that the appeal filed by the department is without any substance and merit. Same is dismissed. (operative part of the order pronounced in the Court) – Case laws – Decisions – Judgements – O
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