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2016 (8) TMI 389

Head Note:
Liability of duty - processing of secondary raw materials (steel scrap of difference and variable composition) into blended steel scrap - Held that:- the input is unprocessed steel scrap and output is blended steel scrap. The blended steel scrap is produced with required chemical composition by mixing various Low manganese and High manganese scraps and is fit to be used as raw material in the manufacture of various products of steel. Further, blended steel scrap is not put to the same use to which the unprocessed steel scrap is put and vice versa. Therefore, input i.e. unprocessed steel scrap is distinct from output i.e. blended steel scrap. Though both (input and output) would fall under the category of scrap, but are completely different types of scraps. Further, processing of unprocessed stainless steel scrap into blended stainless steel scrap would result into input (unprocessed stainless steel) losing its identity and new commodity i.e. blended stainless steel scrap coming in existence.

Therefore, when said unprocessed steel scrap undergoes above process, a new product saleable in the market, which is having a distinct identity and use, comes into existence and is known in the commercial market by a different name. Further, blended steel scrap possesses higher utility than the unprocessed scrap steel. Therefore, applicant’s contention that the production of blended steel scrap by processing unprocessed scrap steel amounts to manufacture under the Central Excise Act, 1944, is correct followed by the judgment of AAR in the case of ELG India Private Limited Vs. CCE, Chandigarh [2013 (8) TMI 537 - AUTHORITY FOR ADVANCE RULINGS].

Classification - “blended metal scrap” - whether to be classifiable under Chapter 72044900 of the CETA, 1985 - Held that:- classification of “blended metal scrap” under Chapter 72044900 of the Central Excise Tariff Act, 1985 has rightly not been opposed by the Revenue. It is noticed that blended metal scrap is covered under Chapter Head No. 72044900 in the First Schedule – “Others – Ferrous waste and scrap” under the Central Excise Tariff Act, 1985.

 


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