In this regard, reliance can be placed on the decision of Hon’ble Mum Tribunal in case of AURANGABAD ELECTRICALS LTD v. CCEx [Appeal No. E/88587, 88588/14-MUM] wherein the appellant was a manufacturer of Motor vehicle aluminum parts and the said process resulted in generation of dross which was given freely for conversion of the same into ingot to a Job Worker.
Since the no duty was charged by the appellant, the department raised a demand of duty on the impugned transaction. The Counsel for the appellant submitted that the goods were never removed from the factory premises, so the impugned demand is bad in law and liable to be quashed. He further submitted that the said the said good supplied by the Job Worker is input for the manufacturer for the appellant and thus benefit of Notification 67/95-CE should be available. Without prejudice to afore-said, he further contended that the said transaction would be covered under Rule 4(5)(a) and thus impugned demand should be dropped. It was further argued relying on the recent decision in case of Hindalco Industries Limited that aluminium dross is not excisable.
Per contra, department submitted that aluminum dross is not an input for the appellant and thus Rule 4(5)(a) has no application. Further, it was contested that since a part of factory was rented to Job Worker and thus the said part cannot be said to be a part of the appellant’s premises and thus benefit of Notification No 67/95-CE shall not be available.
Hon’ble Tribunal held that benefit of Notification 67/95-CE shall not be available agreeing with the argument of the department. However, it was held that the said transaction would be undoubtly be covered under Rule 4(5)(a) and thus the demand was dropped.