TMI Blog1990 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi observing that the wire netting scrap produced and cleared by the appellants satisfy the test for goods to attract Central Excise duty, as there was no doubt about marketability of such scrap. The present appeal is against this decision on the question of classification of the wire netting scrap. Actually, while taking the above decision, the Collector (Appeals) has granted substantial relief to the appellants by holding that demand for duty of Rs. 39,700.18 on wire netting scrap cleared during the period 11-1-1978 to 30-4-1980 against a show cause notice dated 12-9-1980 was time barred for most of the period covered by the notice. Accordingly, the appellants got refund of a sum of Rs. 39,384.10 as against the amount of Rs. 39,700.10 deposited by them against the confirmed demand. Thus, the present appeal is confined only to the question of classification and dutiability of the wire netting scrap in question. 3. The second Appeal E/2186/85-B1 is directed against Order-in-Original No. 84/Excise dated 2-7-1985 passed by the Additional Collector of Customs Central Excise, Jaipur, demanding Central Excise duty of Rs. 37,234.95 and imposing a penalty of Rs. 2,000/- on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri K.D. Tayal, learned S.D.R. He submitted that the appellants had resorted to mis-declaration in the classification list and furnished false details in the invoices covering their supplies to their customers. Actually, they had cleared and sold wire netting scrap but mis-declared them in the invoices as wire scrap. He referred to the adjudication order passed by the Assistant Collector of Central Excise contained in the appeal E/2864/84-B1 wherein he had pointed out that the so-called rejections and cuttings were fully manufactured wire netting, ranging from 0.25 to 4 metres. Shri Tayal contended that these goods of such sizes and dimensions are not really scrap and would attract classification under Item 68 and the adjudication by the Additional Collector was in order. He relied upon the decisions of the Tribunal in Indian Record Manufacturing Company Ltd. v. Collector of Central Excise, Calcutta, reported in 1984 (16) E.L.T. 324 (Tribunal), Collector of Central Excise, Calcutta v. Titagarh Paper Mills Company Ltd., reported in 1984 (17) E.L.T. 417 (Tribunal), and U Foam Limited, Hyderabad v. Collector of Central Excise, Hyderabad, reported in 1983 (14) E.L.T. 2502 Cegat. He dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that if the scrap of wire is nothing but an entangled mass it would be difficult to see how they have to be regarded as finished product simply because they are sold as such. It was also held that scrap is not assessable under Item 68 of the Central Excise Tariff as it is a rejected product and not intentionally manufactured prime goods with a new name, character and use. Item 68 was designed only to cover prime goods not elsewhere specified and not waste and scrap, which, if taxable, are especially included in the relevant Tariff Item. We have taken note of the attempt made by Shri Tayal to distinguish this case from the present matters by pointing out that in the case decided earlier by the Tribunal, the scrap was in the form of an entangled mass which was not the case with the wire netting scrap manufactured and cleared by the appellants. We feel that scrap can be of different varieties and being an entangled mass is not a sine qua non for the cuttings of the product wire netting to be considered as scrap. 8. The decision of the Hon ble High Court of Delhi in Modi Rubber Limited v. Union of India has been relied upon by the Tribunal in the case of Collector of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that dross and skimmings were not the result of treatment, labour or manipulation whereby the end-product is dross and skimmings. They were merely the refuse or scum or rubbish thrown out in the course of the manufacture of the finished product, viz. aluminium sheets. Nor were they a by-product. The Court observed that almost anything could be sold for a price but this circumstance would not alone be conclusive of the excisability of the product. The observations of the Delhi High Court in the Modi Rubber Case (supra) are to the same effect. The Court had further noted that wherever the legislature sought to tax waste or scrap, it specifically provided for the purpose, as for example, in Item Nos. 18-1 V, 15A. Applying the above reasoning of the Delhi and Bombay High Courts to the facts and circumstances of the present cases, we find that under Tariff Item 26A relating to copper there is a specific sub-item 1(b) relating to waste and scrap. Shri Sooji had pointed out that Notification No. 33/81 dated 1-3-1981 specifically exempts, inter alia, waste and scraps of copper falling under Item No. 26A. We find that the conditions stipulated in this Notification are satisfied in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-10-1987. Detailed reasons have been spelt out for the proposition that waste and scrap, if not covered specifically under a Tariff Item cannot be held to be excisable under Tariff Item 68. These reasons could not apparently be taken into account in the case of Indian Record Manufacturing Company Limited. Likewise, in the other matter relating to Titagarh Paper Mills, manufacturers were held to be liable to pay duty on defective paper removed by them for being re-pulped within the factory as they had not entered the stocks in the RG-1 nor approached the authorities for waiver of duty, which they should have done. The factors coverd in the judgment of Hon ble Delhi High Court in Modi Rubber Limited matter and by the Hon ble Bombay High Court in the Indian Aluminium Company Limited matter had not been taken note of. Though when the Tribunal decision in the case of Collector of Central Excise, Calcutta v. Titagarh Paper Mills Limited was taken on 29-2-1984, Modi Rubber Limited judgment of Delhi High Court was not available, that case being decided subsequently on 18-12-1986. 10. Coming to the third case cited by Shri Tayal viz. 1983 (14) E.L.T. 2502 (Tribunal) in the case of U. Foa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings above. It is seen that in the proceedings before the lower authorities the appellants had contended that they had included wire netting scrap in their classification lists filed for successive years. The Assistant Collector had observed in his order that mere inclusion of scrap in the classification list would not make it duty free; more so, when they had not stated the size of scrap in the classification list. The impugned order of the Additional Collector essentially follows the same course. The demand confirmed by the Additional Collector in his order relates to the period 1-1-1981 to 11-3-1983 for which show cause notice was issued on 28-3-1983 invoking the extended period available in terms of the proviso to Section 11A of the Central Excises Salt Act, 1944. We find that the appellants had been submitting the classification lists for successive years in which they had included wire netting scraps under Sl. No. 5 of Form-1 under the caption Particulars of other goods produced or manufactured and intended to be removed by the assessee. This information was in addition to the excisable goods, wire netting and other items which they had declared in the classification list ..... X X X X Extracts X X X X X X X X Extracts X X X X
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