2000 (9) TMI 544 - AT - Central Excise

Summary

Issues:
Whether runners and risers are eligible for exemption from excise duty as waste and scrap under notification No. 49/97-CE dated 1-8-1997.

Analysis:
The appeals by Revenue raised the issue of whether runners and risers, emerging during the manufacture of ingots, are eligible for exemption from excise duty under notification No. 49/97-CE dated 1-8-1997 as waste and scrap. The Assistant Commissioner initially demanded duty on runners and risers, considering them not as ingots or billets but as classifiable under sub-heading 7206.90 of the Central Excise Tariff. However, the Commissioner (Appeals) set aside the demand, stating that runners and risers qualify as scrap under Note 6(a) to Section XV of the Tariff and are eligible for exemption under the said notification.

The Revenue argued that runners and risers are not ingots or billets and cannot be treated as waste and scrap, emphasizing the classification under sub-heading 7206.90. They contended that the exemption under notification No. 49/97-CE is only for waste and scrap, not for products like runners and risers. The Respondents, on the other hand, argued that runners and risers should be considered scrap, citing previous decisions and the use of such materials for melting and production of steel ingots.

The Tribunal analyzed the nature of runners and risers, noting their formation during the ingot manufacturing process and their subsequent use for melting purposes. The Tribunal referenced previous cases to determine the classification of these materials, distinguishing between those fit for rolling and those fit for melting. It concluded that runners and risers, arising during the manufacture of ingots, fall within the scope of waste and scrap as per notification No. 49/97-CE, regardless of their specific classification under the Tariff.

Considering the broad scope of waste and scrap mentioned in the notification, the Tribunal upheld the exemption for runners and risers, as they met the criteria of arising during the manufacture of ingots in an induction furnace unit. The Tribunal highlighted that the exemption was not limited to waste and scrap falling under a specific heading and referenced a government circular supporting the exemption for waste and scrap in such manufacturing processes. Consequently, the appeals by Revenue were rejected, affirming the eligibility of runners and risers for exemption under notification No. 49/97-CE.