2000 (7) TMI 114 - AT - Central Excise

Summary

Issues:
- Whether metal waste arising during the manufacture of metal containers is eligible for exemption under specific notifications.

Analysis:
1. Exemption under Notification 91/88:
- The issue revolved around metal waste arising during the manufacture of metal containers and its eligibility for exemption under Notification 91/88 and Notification 171/88. The Larger Bench was constituted due to a conflict between previous decisions.

2. Interpretation of Notification 91/88:
- The appellant argued that the waste arising during the manufacture of metal containers should be covered under sub-clause (ii) of the notification, as it pertains to "all goods" falling within the Central Excise Schedule.

3. Appellant's Contentions:
- The appellant contended that waste arises from metal sheets, coils, and strips during the manufacturing process of metal containers, not directly from goods covered by Chapter 72. They cited a previous Tribunal decision supporting their claim.

4. Department's Argument:
- The Departmental Representative argued that the waste arises from the inputs, i.e., metal coils, sheets, and strips, and not from any manufactured product like metal containers. They highlighted the wording of the notification to support their stance.

5. Tribunal's Decision:
- The Tribunal analyzed the manufacturing process of metal containers, noting that waste arises at various stages from sheets, coils, and strips, not from the final product. The Tribunal affirmed that Modvat credit on inputs rendered the waste ineligible for exemption under the notifications.

6. Precedent and Legal Analysis:
- The Tribunal referenced previous decisions and concluded that waste arising from metal containers' manufacture is not eligible for exemption under the notifications due to Modvat credit availed on inputs. The Tribunal upheld the view expressed in Guest Keen Williams Ltd. and Amar Steel Container Corporation cases.

7. Final Verdict:
- Consequently, the appeal was rejected, and the Department was authorized to recover duty on the waste and scrap from the appellant, who had executed a bond as directed by the High Court of Bombay. The Tribunal emphasized the ineligibility for exemption due to Modvat credit taken on inputs.