TMI Blog2018 (11) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... & maintenance cannot be covered within the Note 8 (a) ibid. The dutiability Waste & Scrap arising out of old and used capital goods has also been considered by the Tribunal in various decisions and it has been decided that such scrap will be not dutiable. Waste & Scrap cleared by the appellant is not dutiable - appeal dismissed - decided against Revenue. - Ex/181/2007 - FO/A/76751/2018 - Dated:- 4-10-2018 - Shri V. Padmanabhan, Member (Technical) and Shri S. K. Pati, Member (Judicial) Shri K. Choudhari, Suptd. (AR) for the Appellant (s) Dr. Samir Chakraborty, Sr. Advocate for the Respondent(s) ORDER The present appeal is filed by the Revenue against Order-in-Appeal No. 131/KOL-IV/2006 dated 27.11.2006. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence mischief of Section 2 (f) will not be attracted. Revenue has filed the present appeal challenging the dropping of such demand. 3. The case of the Revenue has been argued by Shri K. Choudhary Ld. D. R., who emphasizes the following significant grounds of appeal: (i) He refers to Section Note 8 (a) to Section XV Central Excise Tariff which states that Waste Scrap are nothing but Metal Waste Scrap arising from the manufacture of mechanical working of Metal and Metal goods. Waste Scrap cleared by the assessee would fall within the above Section note and hence liable for payment of duty. (ii) The Revenue seeks to disagree with the observations of the Ld. Commissioner (Appeals) in the impugned order to the effect that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings of the lower authority. (ii) He also submitted that the duty of Waste Scrap of old and used of capital goods, have also been held to be not payable in the various decisions of the Tribunal. He cited the following decisions. (1). Kissan Co-Op Sugar Factory Ltd. Vs. Commissioner of Central Excise, 2008 (226) E.L.T. 196 (T). (2). Birla Corporation Ltd. Vs. Commissioner of Central Excise, 2009 (236) E.L.T 476 (T) finally he submitted that the order passed by the lower authority may be sustain. 5. Heard both sides and perused the appeal records. 6. The crux of the present dispute is whether duty is liable to be paid for clearance of Waste Scrap arising out of old and used capital goods during the period 01.02.2000 to 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end product due to manufacturing process does not arise for our consideration. The repairing activity in any possible manner cannot be called as a part of manufacturing activity in relation to production of end product. Therefore, the M.S. scrap and Iron scrap cannot be said to be a by-product of the final product. At the best, it is the by-product of the repairing process which uses welding electrodes, mild steel, cutting tools, M.S. Angles, M.S. Channels, M.S. Beams etc. 15 . Learned ASG has placed reliance on the decision of this Court in CST v. Bharat Petroleum Corpn. Ltd. (supra). In that case, the assessee purchased sulphuric acid and cotton for the manufacturing of kerosene and yarn/cloth. In the manufacturing process, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Appeals) order upholding the order of the original authority is reproduced below : 5. From the submission made by the appellant it is evident that they had availed Modvat credit on the obsolete/outlived machineries when these were received and removed the same as waste and scrap. I find that Section Note 8(a) of Section XV of CETA, 85 covers metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely useable as such, because of breakage, cutting up, weal or other reasons. The waste and scrap of iron and steel and other metals being specifically classifiable under the respective Chapter heading of these metal have come into existence within the factory and hence are chargeable to duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, the scrap in question is of old and used capital goods and it is not arising out of mechanical working of metals in the factory. The Tribunal in the decisions relied upon by the appellant specifically held that such scrap is not dutiable. In view of this, we find merit in the contention of appellant. Impugned order is set aside and appeals are allowed. 7. In the light of the above, we are not able to sustain the orders of the authorities below and accordingly, we set aside the same and allow the appeal with consequential relief. 9. In the line with the above decision, it clearly emerges that Waste Scrap cleared by the appellant is not dutiable. Consequently, we find no infirmity in the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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