1998 (6) TMI 151 - AT - Central Excise

Summary

Issues:
1. Applicability of exemption under Notification 217/86 for waste products in manufacturing process.

Analysis:
The case involved a dispute where the appellant, engaged in manufacturing electric bulbs and tube lights, used lead-in-wires and filament wire for captive consumption under an exemption notification. The department objected, claiming that the waste quantity of these inputs not used in the final product was not eligible for the exemption. The Collector demanded excise duty and imposed a penalty, leading to the present appeal challenging this decision.

The appellant argued that any quantity used in the manufacturing process but becoming waste should be deemed as used in manufacturing, citing the Supreme Court judgment in Multimetals Ltd. v. Assistant Collector of Central Excise. On the other hand, the Departmental Representative contended that the inputs had become dutiable articles before being wasted during manufacturing, distinguishing it from the case cited by the appellant.

Upon considering the submissions and the Supreme Court judgment, the Tribunal found that the inputs lost in the manufacturing process, leading to waste, should be treated as part of the manufacturing process itself. Referring to the Multimetals Ltd. case and the Steel Authority of India Ltd. case, the Tribunal emphasized that inputs intended for manufacturing, even if part of it becomes waste, should not be treated differently from inputs directly used in the final product. The Tribunal concluded that the waste arising from the manufacturing process should be considered in the same manner as manufacturing loss, thereby setting aside the Collector's order and allowing the appeal.