Clearance of by-products, rejects, waste, scrap, remnants, non-excisable goods, etc. - CBEC's Customs Manual 2023 - Customs

19. Clearance of by-products, rejects, waste, scrap, remnants, non-excisable goods, etc.: 19.1 Scrap/ waste/ remnants arising out of production process or in connection therewith are allowed to be sold in DTA, as per SION notified by Directorate General of Foreign Trade (under Duty Exemption Scheme), on payment of concessional duties/GST as applicable. Such sales of scrap/ waste/ remnants shall not be subject to achievement of positive NFE. In respect of items not covered by SION norms, Development Commissioner may fix ad-hoc norms for a period of six months and within this period, norm should be fixed by Norms Committee and ad-hoc norms will continue till such time. Sale of waste/ scrap/ remnants by units not entitled to DTA sale, or sales beyond DTA sale entitlement, shall be on payment of full duties. Scrap/ waste/ remnants may also be exported. However, no duties/ taxes on scrap/ waste/ remnants are charged, in case same are destroyed with permission of Central Excise Customs authorities. 19.2 The DTA clearance of by-products and rejects is not allowed to the EOUs, which have failed to achieve the positive NFE. 19.3 DTA clearance of goods manufactured by the EOUs which are not excisable the duty on inputs and consumables etc. procured/ imported duty free under exemption notifications, which have gone into production of such non- excisable goods cleared into DTA, is recovered, besides payment of GST. 19.4 In case of Gems and Jewellery EOUs and EHTP/STP units, scrap, dust or sweepings of gold/ silver/ platinum generated in the unit is allowed to be forwarded to the Government Mint or Private Mint for conversion into standard gold bars and return thereof to the unit subject to the observance of procedure laid down by the Commissioner of Central Excise Customs. The said dust, scrap or sweepings are also allowed clearance into DTA on payment of applicable customs duty on the gold/ silver/ platinum content in the said scrap, dust or sweepings. Samples of the sweepings/ dust are taken at the time of clearance and sent to mint for assaying. The assessment is finalized when the reports are received from the mint. [Refer Circular No.19/99-Cus, dated 29-4-1999] 19.5 The rate of duties for excisable by-products, rejects, waste etc, cleared in DTA by an EOU are prescribed under Notification No. 23/2003-CE, dated 31-3-2003.