TMI Blog1993 (2) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... s got damaged and they were found to be unfit for human consumption. Hence they had applied for permission to destroy these damaged capsules, which have accrued during the period 5-1-1979 to 31-12-1980. Such an application was made on 26-2-1982. However, a show cause notice was issued by the Assistant Collector on 18-9-1982, alleging that the waste has not accrued in the process of manufacture and these capsules which have been received, in respect of which duty credit has been taken, have to be removed on payment of duty. Hence the show cause notice was issued. However, in the adjudication proceedings held by the Assistant Collector he dropped the charge on the ground that the waste has arisen in the process of manufacture and the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er bond or on payment of duty, or (b) be removed on payment of duty for home use : Provided that where such material or component parts are removed from the factory for home use on payment of duty, such duty shall in no case be less than the amount of credit that has been allowed in respect of such material or component parts under sub-rule (2)." The relevant portion of sub-clause (iv) of Rule 56A(3) is also reproduced below :- (iv) Any waste arising from the process of manufacture to which the materials or component parts, in respect of which credit has been allowed under sub-rule (2), may be subjected in the manufacturer s factory shall - (a) be removed on payment of duty, or (b) where it belongs to such class or category of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which credit has been allowed, are cleared as such. In that case they have to pay appropriate duty before clearance. That is what is contemplated in Clause (3)(iii). Clause (3)(iv)(c) would arise when any material has been damaged and becomes a waste in the process of manufacture. In that case, such waste is to be removed on payment of duty or it can be removed under Chapter X procedure if it belongs to such class of waste and it is specified by the Central Govt. or in the alternative if the waste is found unfit for further use, it can be destroyed before the proper officer for the purpose of remitting the duty leviable thereon. Hence in my view while clause (iii) of Rule 56A(3) states the general proposition that the materials in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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