TMI Blog2015 (12) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of manufacturing of their final products. Therefore the said scrap/waste have not passed the test of manufacture. In the circumstances, the duty is not payable as held by the Apex Court in the case of West Coast Industrial Gases Ltd. (supra). As the waste and scrap does not pass the test of manufacture, therefore, no duty is payable by the appellants. Demand - Emergence of scrap of grinding sludge and used/mixed scrap of effluent water - Held that: - the entire quantity of duty paid inputs have been used in relation to the manufacture of dutiable final product. For manufacture of required quantity of final product, the appellants used predetermined quantities of the inputs resulting in the emergence of the dutiable final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case are that the appellants are engaged in the manufacture of motor vehicles and parts thereof. The appellants procured various inputs for the purpose of manufacturing their final products which are supplied to the appellants by various vendors. The packing materials of the inputs such as drums, boxes, cartons, jars, etc. are disposed of as scrap after the inputs contained in them are removed for use. Also mix-scrap of grinding sludge and used/mixed oil and effluent water comes into existence as waste product during the general manufacturing process of cars and the same are sold as waste or scrap. The scrap of packing material in which the appellants receive inputs have been categorized by the department as scrap other than scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judicial pronouncements : i. CCE v. West Coast Industrial Gases Ltd. - 2003 (155) E.L.T. 11 (S.C.) ii. CCE, Bangalore v. Wipro Ltd. - 2002 (150) E.L.T. 249 (Tri.) maintained by the Hon ble Supreme Court as reported at 2003 (154) E.L.T. A175 (S.C.). iii. CCE, Bangalore-II v. Mysore Cement Ltd. - 2006 (206) E.L.T. 1179 (Kar.) iv. IOL v. CCE - 1993 (68) E.L.T. 624 (Tri.) v. Apollo Tyres Ltd. v. CCE, Vadodara - 2005 (185) E.L.T. 183 (Tri.) vi. CCE, Bhopal v. Hindustan Lever Ltd. - 2001 (137) E.L.T. 751 (Tri.). 4. With regard to the mix-scrap/of grinding sludge and used/mixed scrap of effluent water not manufacture, he submitted that the entire quantity of the duty paid inputs have been used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, we find that the Central Excise duty of ₹ 5,37,06,889/- has been confirmed on account of scrap other than scrap of grinding sludge and used/mixed scrap of effluent water and ₹ 16,17,154/- on account of sale of mix-scrap of grinding sludge and used/mixed oil and effluent water. The appellants have filed a chart of the item-wise description of the nature of the scrap and waste disposed/sold (along with the item-code designated by them for record purposes) is as follows :- Mix-scrap of Grinding Sludge used/mixed oil effluent water Mix-scrap of Grinding Sludge Grinding sludge is a waste of grinding wheels, generated while machining of engine components from machining process. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h polythene, cardboard or thermocol to avoid damages. Supply also comes in carton boxes. Empty carton boxes are sold as scrap along with this item. Rusted/damaged/de-shaped/burn mild steel drums These drums are used for storage of various fluids. Once damaged or rusted, the drums are sold as scrap. Empty MS drums of different sizes Supply of paint, thinner, sealers, oil etc., liquid items which are used for production in paint/engine shop supplied in these drums. After usage these drums are sold as empty drums. Plastic Drums Coolant is supplied in plastic drums by vendors for production process. After usage these drums are sold as empty drums. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct. For manufacture of required quantity of final product, the appellants used predetermined quantities of the inputs resulting in the emergence of the dutiable final product. Therefore, it is not possible for the appellant to manufacture the desired dutiable final product by using a lesser quantity of the inputs, so as to avoid the generation of the waste. Therefore the entire quantity of the duty paid inputs was used in the manufacture of final products and not in relation to the manufacture of the waste/scrap. Therefore, the emergence cannot be waste part of the goods have been used to manufacture such waste. In that circumstance and in light of the decision of the Tamil Nadu Petro Products Ltd. (supra) and Indo Rama Synthetics (India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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