1996 (9) TMI 372 - AT - Central Excise

Summary

Issues:
Classification of waste and scrap under Central Excise Tariff, eligibility for exemption under Notification 204/83-C.E., classification of goods under Item No. 25 and Item No. 28A of the Tariff.

Analysis:
The case involved an appeal by M/s. Devi Dayal Stainless Steel Indust. (P) Ltd. regarding the classification of waste and scrap for exemption under Notification 204/83-C.E. The appellant processed duty-paid stainless steel sheets into laminations and stampings, claiming exemption under Item No. 25 and Item No. 28A of the Central Excise Tariff. The Collector of Central Excise (Appeals) denied the exemption, classifying the waste and scrap under Item No. 25 as they arose before the goods reached the stage of stamping.

Upon hearing both sides, the Tribunal analyzed the classification of waste and scrap by the appellants under Item No. 25(3)(II). The material from which the waste arose was duty paid, and the credit had been utilized for excise duty payment on stampings under Item No. 28A. The Tribunal held that until the blanks were further processed and assembled, the goods remained under Item No. 25 classification. The waste generated during the blanking stage was considered to fall under Item No. 25, as the goods had not yet reached the stage of stamping.

The appellant's argument, supported by a reference to a Tribunal decision in Johnson Fabrics Co. v. CCE, emphasized that at the blanking stage, the goods were not fully converted into stampings, aligning with the classification under Item No. 25. Another Collector (Appeals) decision was cited, where scrap arising during the manufacture of electrical stampings under Item No. 28A was exempted under Notification No. 204/83. However, the Tribunal distinguished this case, emphasizing that the waste at the blanking stage did not arise from goods classified under Item No. 28A.

In conclusion, the Tribunal upheld the Collector's classification under Item No. 25, as the waste and scrap had not originated from goods falling under Item No. 28A. The Tribunal rejected the appeal, affirming the Collector's decision and denying the exemption under Notification 204/83-C.E.