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2021 (3) TMI 153 - AT - Central ExciseProcess amounting to manufacture - Department entertained a view that the scrap arising out of such activity of cutting and slitting of steel coils is covered under the definition of ‘waste and scrap’ mentioned in Note 8 to Section XV of the Central Excise Tariff Act, 1985 and therefore, the same is liable to Excise Duty - HELD THAT:- The C.B.E.C. vide Circular No. 811/8/2005-CX dated 02.03.2005 has clarified that the process of cutting of HR/CR coils of iron or non-alloy steel into sheets or slitting into strips of lesser width would not amount to manufacture. So also, in the case COMMISSIONER OF CENTRAL EXCISE VERSUS INDIAN ALUMINIUM CO. LTD. [2006 (9) TMI 6 - SUPREME COURT] it has been held that the process of cutting/slitting of jumbo coils into baby coils/sheets would not amount to manufacture. When the process of cutting and slitting itself does not amount to manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944, scrap arising out of such activity cannot be subjected to Excise Duty for the simple reason that the appellant has not consciously manufactured any waste or scrap. Emergence of such waste and scrap of iron is incidental to the activity of slitting and cutting of bigger coils into smaller ones - The very same issue was decided by the Tribunal in the case of RAIL COACH FACTORY VERSUS COMMISSIONER OF CENTRAL EXCISE, JALLANDHAR [2008 (7) TMI 787 - CESTAT, NEW DELHI]. Notification No. 89/95-CE dated 18.05.1995 issued by the Department also supports the contentions of the assessee. Appeal allowed - decided in favor of appellant.
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