2001 (12) TMI 249 - AT - Central Excise

Summary

Issues:
1. Whether the scrap generated by hammering of defective cell batteries is chargeable to Central Excise duty under specific headings of the First Schedule to the Central Excise Tariff Act.

Analysis:
The appeal involved a dispute regarding the classification of scrap generated from hammering defective cell batteries for Central Excise duty purposes. The Appellant, M/s. Eveready Industries Ltd., argued that the hammered batteries' scrap should not be subject to duty as it did not constitute a new excisable product. They contended that waste and scrap of dry cell batteries were not specified in the Central Excise Tariff, hence should not attract duty. The Appellant also highlighted a previous decision by the Delhi High Court and the Apex Court, which they believed supported their position. Additionally, they argued that the hammered dry cell batteries were not solely zinc waste and scrap, as the zinc content was only around 16% to 20%.

The Respondent, represented by Shri Ashok Kumar, countered the Appellant's arguments by stating that the waste and scrap arose during the manufacture of finished goods, invoking specific provisions of the Central Excise Rules. They claimed that the scrap was sold based on its zinc content and referred to the classification list filed by the Appellants, which described the goods as "hammered cells" and "zinc scrap/waste." The Respondent relied on a decision by a Larger Bench in a different case to support their position.

After considering both sides' submissions, the Tribunal concluded that the waste and scrap in question arose during the manufacturing process of the final product. They agreed with the Respondent that the waste should be disposed of according to the Central Excise Rules. However, the Tribunal found that the waste from the hammered dry cell batteries was not solely zinc waste but a composite waste of dry cell batteries. They noted that the Central Excise Tariff did not provide a specific heading for waste and scrap of dry cell batteries, similar to a previous case involving telecommunication wires. Therefore, the Tribunal ruled in favor of the Appellant, setting aside the impugned Order and allowing the appeal.