1980 (9) TMI 274 - Board - Central Excise

Summary

Issues: Classification of scrap material under Central Excise Tariff Item 68

The judgment pertains to the classification of scrap material by an appellant under the Central Excise Tariff. The appellants manufacture Aluminium Conductors from duty paid Aluminium Wire Rods, and the waste material generated in the process is sold as scrap. The Collector classified the scrap material under Central Excise Tariff Item 68, contending that since it can be bought and sold, it falls under this category. However, the appellants argued that the scrap material should be classified under Tariff Item 27(a) as it is not a distinct and separate product until re-melted. They relied on various court decisions to support their contention that mere processing does not constitute manufacturing unless a new product emerges. The Board noted that the material in question is processing waste and cannot be considered as goods manufactured under the statutes. They referenced the Supreme Court's definition of "manufacture," emphasizing the need for a transformation into a new and distinct article with a different character or use. The Board found the classification under the residuary Item 68 unwarranted and cited the principle that items should be classified under enumerated categories rather than the residuary clause. Consequently, the Board upheld the appeal and set aside the Collector's order.