2004 (2) TMI 425 - AT - Central Excise

Summary

Issues: Revenue appeal against non-taxability of waste/scrap of guar gum powder and tamarind kernel powder.

Analysis:
1. Issue of Taxability of Waste/Scrap: The Revenue appealed against the order-in-appeal where it was held that waste/scrap of guar gum powder and tamarind kernel powder is not excisable as it does not find mention in the Central Excise Tariff. The Revenue argued that the waste generated during the manufacturing process of final products is of inferior quality and should be considered excisable, thus attracting duty payment.

2. Nature of Waste Generated: The respondents contended that two types of waste are produced during manufacturing. The first type is dust formed during the conveyance of powder between different stages of production. This dust, separated from air by cyclone and retained in filter bags for pollution control, is considered waste. The second type of waste is oversize material with impurities generated during screening processes, deemed unusable and without buyers.

3. Legal Interpretation: The respondents argued that the waste generated, i.e., dust/scrap, does not fall under any sub-heading of Chapter 13 or Chapter 35 of the Central Excise Tariff. The Tribunal analyzed that the Revenue did not dispute the manufacturing process leading to the waste and scrap in question. The Tribunal found that the waste and scrap under consideration were not akin to the final products and were not specified in the Central Excise Tariff, thereby upholding the order-in-appeal.

4. Conclusion: The Tribunal dismissed the appeal, stating that the waste and scrap in dispute were not covered under any sub-heading of the Central Excise Tariff. Since the Revenue did not contest the manufacturing process of the waste and scrap, the argument that it resembled final products and was excisable was rejected. Consequently, the Tribunal found no fault in the impugned order and upheld the non-taxability of the waste/scrap of guar gum powder and tamarind kernel powder.