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2015 (12) TMI 1598 - AT - Central ExciseManufacture - various types of scrap/waste of packing material remaining after removal of inputs therefrom and the scrap of grinding sludge and used/mixed oil and effluent water - as all the waste and scrap are excisable, the duty was sought to be demanded on the value of waste other than the scrap of grinding sludge - Held that: - the scrap of packing material is nothing but scrap/waste of packing material in which the appellants have received various inputs required for manufacture of final products. These scrap/waste have not been manufactured by the appellant and have not been arisen during the course of manufacturing of their final products. Therefore the said scrap/waste have not passed the test of manufacture. In the circumstances, the duty is not payable as held by the Apex Court in the case of West Coast Industrial Gases Ltd. (supra). As the waste and scrap does not pass the test of manufacture, therefore, no duty is payable by the appellants. Demand - Emergence of scrap of grinding sludge and used/mixed scrap of effluent water - Held that: - the entire quantity of duty paid inputs have been used in relation to the manufacture of dutiable final product. For manufacture of required quantity of final product, the appellants used predetermined quantities of the inputs resulting in the emergence of the dutiable final product. Therefore, it is not possible for the appellant to manufacture the desired dutiable final product by using a lesser quantity of the inputs, so as to avoid the generation of the waste. Therefore the entire quantity of the duty paid inputs was used in the manufacture of final products and not in relation to the manufacture of the waste/scrap. Therefore, the emergence cannot be waste part of the goods have been used to manufacture such waste. THE waste is not on account of manufacture, therefore, the appellants are not liable to pay duty. - appeal allowed.
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