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TMI Blog1986 (2) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... those containers. They had been submitting from time to time to the Central Excise Authorities that in the course of manufacture of electric batteries certain number of battery containers were getting damaged and became unserviceable. They were also applying for permission to destroy such damaged containers under Rule 56-A(3)(iv)(c). The jurisdiction Superintendent, however, refused permission to destroy and demanded duty on such containers. Against two such demands dated 27.7.1978 and 29.9.1978 the assessee filed an appeal before the Appellate Collector of Central Excise, Bombay. The Appellate Collector accepted the contentions of the assessee that the damage of the containers occurred during the course of manufacture and therefore Rule 56-A(3)(iv)(c) was attracted and accordingly he set .aside the order of the Superintendent and directed the Superintendent to allow the assessee to destroy the unserviceable battery cases and to grant remission of duty on those cases. The Government of India however, came to a tentative conclusion that the interpretation of Rule 56-A(3)(iv)(c) made by the Appellate Collector was erroneous in law. The Government of India was further of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed under the said Rule 56-A. Finally they submitted when the literal meaning of the words used in the statutory provision would manifestly defeat its object by making a part of it meaningless and ineffective. It is legitimate and even necessary, to adopt the rule of literal construction so as to give meaning to all parts of the provision and to make the whole of it effective and operate. They, therefore, requested to withdraw the show cause notice and to cancel the same. 4. During the hearing of this appeal, Shri Pattekar submitted that the view taken by the Appellate Collector is erroneous the waste contemplated by Rule 56A(3)(iv) is not the waste of the type pleaded by M/s. Chloride India Ltd. The view taken by the Government of India in the review show cause notice is the correct view. He urged that if the battery container gets damaged during the process of manufacture it may not be useful for further manufacture but it does not become waste within the meaning of the expression used in the said Rule. The waste contemplated by the said Rule is the waste produced along with finished goods. 5. Shri Deshmukh, however, submitted that the containers are essential component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case. The assessee M/s. Chloride India Ltd., at the relevant time, were the manufacturers of electric batteries which fall under Tariff Item 31 of CET. For the manufacture of electric batteries they make use of the containers which they receive from the West Bengal battery under Rule 56A procedure, and they obtain proforma credit of the duty paid on those containers in their register R.G. 23 Part II. Admittedly, certain of the containers get damaged or broken in the course of manufacture. Upto January, 1973 the assessee was getting remission of duty on the containers got damaged or which became useless for the completion of the finished product, namely electric batteries. When the assessee sought permission for destroying the damaged containers the jurisdictional Central Excise Superintendent by his Order dated 21.7.1978 and by his further Order dated 29.9.1978 made known to the assessee that parts of electric storage batteries which are damaged or unfit for consumption or marketing during the process of manufacturing electric storage batteries and which are not utilised in the manufacture of electric batteries cannot be held to be waste arising from the process of manufacture a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te contemplated in Rule 56-A(3)(iv) is not the waste of the type pleaded by the assessee. 9. Rule 56-A(3)(iv) deals with waste arising from the process of manufacture. It further contemplates of removal on payment of duty any waste, arising from the process of manufacture to which the materials or component parts in respect of which credit has been allowed under sub-rule (2) of Rule 56-A which may be subjected to the manufacturer s factory. It also provides for removal without payment of duty in the case of waste which belongs to such class or category as the Central Government may, from time to time, by orders specified for the purpose, be removed from the said factory without payment of duty, for being used in the manufacture of class or category of goods as may be specified in the said order subject to the procedure under Chapter X of Central Excise Rules being followed. Sub-clause (c) of 56-A(3)(iv) permits a manufacturer to destroy the waste which is found unfit for further use or not worth the duty payable thereon in the presence of the proper officer. It also provides for claiming remission of duty payable on such waste. Thus, if is clear the expression waste contemplat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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