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2013 (8) TMI 680 - CESTAT NEW DELHIScrap chargeable to duty or not - scrap generated in the repair & maintenance workshop of the factory - The appellants sold the old and worn out parts of the machinery and also the scrap generated in the course of fabrication of parts of the machinery without payment of duty - The department was of the view that this scrap was chargeable to central excise duty - Held that:- The M.S. scrap and Iron scrap cannot be said to be a by-product of the final product - At the best, it was the by-product of the repairing process which uses welding electrodes, mild steel, cutting tools, M.S. Angles, M.S. Channels, M.S. Beams - The metal scrap and waste arise only when the assessee undertakes repairing and maintenance work of the capital goods and, therefore, do not arise regularly and continuously in the course of a manufacturing business of cement. The scrap generated in the repair & maintenance workshop of the factory cannot be said to be the scrap generated in a manufacturing process or a byproduct of manufacturing process and hence the same was not excisable - M/s. Grasim Industries Ltd. Versus Union of India [2011 (10) TMI 2 - SUPREME COURT OF INDIA] - The issue of getting a new identity as M.S. Scrap and Iron Scrap as an end product due to manufacturing process does not arise for consideration - The repairing activity in any possible manner cannot be called as a part of manufacturing activity in relation to production of end product - Order set aside – Decided in favor of assesse.
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