Flue Gas is generated in Manufacture of Coke is not Manufactured Product, Excise Duty is Payable: CESTAT [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the flue gas is generated in manufacture of coke is not manufactured product and hence excise duty is payable.

The Counsel for the appellant submitted that for the earlier proceedings were initiated for the extended period. The Tribunal has decided the issue in their favour as reported in TATA Steel Limited Vs. Commissioner of Central Excise, Haldia.

It was further submitted that the present proceedings are on account of the periodical notice on the same issue for the period of April 2015 to March 2016. Hence he submitted that the present appeal may be allowed.

The Authorized Representative reiterated the findings of the lower authority.

In Ahmedabad Electricity Co. Ltd, the Apex Court observed that “In producing ‘cinder’, there is no manufacturing process involved. Coal is simply burnt as fuel to produce steam. Coal is not tampered with, manipulated or transformed into the end product. For purposes of manufacture the raw material should ultimately get a new identity by virtue of the manufactruing process either on its own or in conjuction or combination with other raw materials. Since coal is not a raw material for the end product in all the cases before us, the question of getting a new identity as an end product due to manufactruring process does not arise.”

The Supreme Court in the case of Hindalco Industries Ltd affirmed that “dross and skimming of aluminium, zinc or other non-ferrous metal emerging during manufacture of aluminium/nonferrous sheets/foils and other products and sold by assessee were not manufactured goods

A Two-Member Bench of the Tribunal comprising R. Muralidhar, Member (Judicial) and K. Anpazhakan, Member (Technical) observed that “In view of the above judicial pronouncements, we hold that the flue gas which is generated in the manufacture of coke is not manufactured product, therefore, duty is not payable.”

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