ORDER
U.L. Bhat, J. (President)
1. Appellant, engaged in the manufacture of iron and steel products, was clearing such products on payment of duty on invoice value under Notification No. 120/75. In respect of the period from July, 1979 to December, 1984, show cause notice dated 18-10-1985 was issued to the appellant alleging that a part of the molten slag was being directly supplied to M/s. ACC Ltd. and a part of the slag which became hard on drying was granulated by crushing and sold to M/s. ACC Ltd., the consideration being the operation and maintenance charges incurred by the appellant in respect of the slag and granulated slag and the consideration was being collected under a separate bill. The notice further alleged that molten slag was excisable product being marketable and, therefore, the value thereof should be treated as part of the invoice price and duty should be paid thereon. Appellant resisted the notice contending that molten slag can be regarded as a total waste similar to aluminium dross and the like and though it is possible to sell it, it cannot be regarded as marketable in the commercial sense and, therefore, not goods, much less excisable goods and, therefore, the demand was not justified.
2. The Collector overruled the above contentions and confirmed the demand.
3. Appellant has placed before us two decisions of the Tribunal taking the view that blast furnace slag cannot be regarded as excisable goods. The earlier decision is seen in Order No. 815 /86-B1, dated 17-12-1986 in Appeal No. 1539/82-B1. The appellant in that case was required by the Department to pay duty on slag being sold to M/s. ACC Ltd. It appears, this decision was challenged by the Department before the Supreme Court, but the appeal was dismissed on the ground of limitation. This decision was followed by the Tribunal in Associated Cement Co. Ltd. case, 1993 (67) E.L.T. 321 (Tribunal). In this decision the Bench also relied on the decision of the High Court of Bombay holding that aluminium dross was not dutiable. The decision of the Bombay High Court has been upheld by the Supreme Court in Union of India v. Indian Aluminium Company Ltd. – 1995 (77) E.L.T. 268 (S.C.). In this decision the Supreme Court observed that it may be possible to recover some metal from aluminium dross and skimmings, they can, therefore, be sold but this does not make them a marketable commodity. Even rubbish can be sold but that does not become marketable. Therefore, everything which is sold is not necessarily a marketable commodity as known commercially. The Supreme Court also observed that aluminium dross and skimmings do arise during the process of manufacture, but these are nothing but-waste or rubbish which are thrown up in the course of manufacture and are different from waste and scrap and are, therefore, not goods. These observations appear to support the view taken by the Tribunal in the two decisions referred to above.
4. In the light of the above decisions, we are not in a position to accept the submission made by Shri Srivastava, SDR that furnace slag is a marketable commodity and is actually being “marketed” by the appellant to various cement companies. Following the view earlier taken by the Tribunal, we accept the contention of the appellant.
5. For the reasons indicated above, we set aside the impugned order and allow the appeal.