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TMI Blog1988 (4) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... able goods, then they were covered by exemption under Notification No. 179/77, dated 18-6-1977 because they were produced without the aid of power. 4. The view taken by Revenue is that the products in question are produced in the course of manufacture of other excisable goods and therefore have to be considered as the result of such manufacture. The lower authorities held that such scraps had a distinct identity as well as a market. As regards correct classification, it was held that such scraps, in the absence of any other Tariff entry goods fall for classification under Tariff Item 68. It was also held that in actual fact, power was used in the production of scraps and therefore exemption under Notification No. 179/77 was also not admissible. 5. When the issue went up before the Collector (Appeals), Central Excise Calcutta, the Appeals were decided in two separate orders, one passed by one Collector (Appeals), for the earlier period and the other passed by his successor for later period. The second order held that scraps arising in the course of some manufacturing process cannot be subjected to duty because they are not manufactured, as such, and cannot be treated as goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were in the nature of scraps rubberised compound, it was only a raw material. This plea was rejected. 8. Apart from the above two Orders-in-appeal, there is another Order-in-appeal No. 91 -93/WB/84, dated 31-3-1984 against which also appeal has been filed by the department (Appeal No. E/2975/84-D). In this Order-in-appeal the Collector (Appeals) has followed the decision of his predecessor No. 183/WB/82, dated 30-8-1982 and therefore there is no separate issue arising for our consideration from this appeal. 9. As against the above appeals filed by the department, are appeals filed by the M/s. Dunlop India Ltd. No. E/1600 to 1602/84-D and E/1207/85-D. Appeal No. E/1600 to 1602/84-D, dated 29th August, 1984 are against Order-in-appeal No. 91-93/WB/84, dated 31-3-1984. Briefly the grounds of appeals of M/s. Dunlop India Ltd. are that the Collector (Appeals) erred in holding the various scraps to be goods merely because they are sold, that scraps were not manufactured and therefore not excisable, and that, in the alternative, even if the goods were excisable, the scrap rubberised nylon and rayon fabrics, scrap cut pieces of belting and air, bags being in the form of plate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion, it is not as a result of manufacture, because no one would produce any such deregarding or even inferior thing. If the raw material of rubber compound has undergone some change in the process of manufacture so as to turn into waste or scrap, it cannot be equated with finished product. There is a change but every change in the raw material is not manufacture. There is no transformation in case of waste/scrap of a new and different article. No one has brought into existence a new substance having distinctive name, character or use. 14. Shri Basu also referred to the judgment of the Bombay High Court in the case of Indian Aluminium Co. Ltd. and Another v. A.K. Bandyopadhayay and Others - 1980 E.LT. 146. 15. We find that in the Indian Aluminium case, it was held as follows :- The question that one must ask oneself is whether therefore dross and skimmings are goods". It may well be that dross and skimmings may be capable of fetching some sale price. In that matter any rubbish can be sold. But that is not the criterion. It cannot be said that dross and skimmings are the result of treatment, labour or manipulation whereby the end-product of manufacture is aluminium sheets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rubbish having no distinctive name, character or use. 18. In the light of the foregoing we are of the view that the issue before us is fully covered by the Modi Rubber decision. 19. Shri K.C. Sachar in the course of his submissions has relied on certain other caselaw. One of the cases is Super Tyres (Pvt.) Ltd., New Delhi v. Collector of Central Excise, Delhi -1987 (31) E.L.T. 452. This matter was decided by this Tribunal on 17th December, 1983 and it was held that scrap rubber also satisfied the definition of goods as it is bought and sold and ultimately used as a raw material for the manufacture of other entd rubber products. 20. The learned SDR also states that he relies on the decision of the Tribunal in the case of Collector of Central Excise, Calcutta v. Inchek Tyres Limited -1987 (30) E.L.T. 313, decided on 23rd March, 1987 in which it was held that scrap rubber arising in the course of manufacture tyres and tubes would be chargeable to duty under Tariff Item 68 of Central Excise Tariff. 21. So far as the Super Tyres (Pvt) Ltd., New Delhi decision of this Tribunal (supra) is concerned, this was obviously taken before the Delhi High Court decision in Modi Rubber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of duty under Item 16A) by being put through the process of destruction prescribed under Rule 49. It may, therefore, suggest that the scrap under consideration resulted out of treatment, labour or manipulation with a view to achieve a product different from the one on which the treatment, labour or manipulation was applied. The resultant commodity (scrap) is known differently from the original product (flaps) and has its own name and market. No doubt the resultant product is not superior to the original product but would be inferior. Shri Haksar submits that the assumption that the original product was a flap is itself not tenable since the process of destruction was to be applied precisely for the reason that what had emerged on the completion of manufacturing process was not a flap, as it could not be commercially disposed of as a flap. This argument does not appear to be very acceptable since, in that event, there would have been no need to apply for, and carry out, the process of destruction prescribed under Rule 49 since such a process would be necessary only in respect of a manufactured product which would normally have to discharge the duty liability on the same and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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