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TMI Blog1989 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... the cut tubes and tyres found defective on manufacture and cleared under Tariff Item 68 of the Central Excise Tariff. The learned Collector (Appeals), however, set aside the lower authority s order for the reasons recorded in his order and reproduced below for convenience of reference: I find that in view of his contention and in view of Explanation to sub-rule (2) of rule 56-A, though cut tubes and defective tubes, cut and cleared for purpose of only nil rate of duty, the same cannot be considered goods for the manufacture of which butyl rubber has been used by the appellants. Appellants has used such rubbers only for manufacture of tubes. But due to reasons beyond their control, some quantity of tubes become defective and not marketabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own that no part of credit shall be utilised same as provided in sub-rule (a) or shall be refunded in cash or by cheque, proforma credit utilisation in respect of payment of duty on waste is prohibited under the Rules. 2. The Collector of Central Excise (Appeals) also grossly erred in holding that cut tyres and cut tubes are not goods. They are goods chargeable to excise duty but are exempted from whole of duty leviable thereon under a Notification issued under Rule 8(1) of Central Excise Rules, 1944 they are classifiable. 3. The question whether a particular material is a waste or a finished excisable goods is one of the fact to be determined taking into consideration classification of such waste. In fact, cut tubes are held as goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced below: RULE 57D. Credit of duty not to be denied or varied in certain circumstances. - (1) Credit of specified duty allowed in respect of any inputs shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse, or by-product arising during the manufacture of the final product, whether or not such waste, refuse or by-product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty or is not specified as a final product under Rule 57A. 5. The learned J.D.R. conceded that explanation to sub-rule (2) of Rule 56A and the provisions of Rule 57D(1) are identical in nature. The learned JDR wanted the meaning to be assigned to the term waste i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give relief to the manufacturers who, no doubt, had utilised the inputs in the manufacturing stream for the intended purpose of manufacturing the end product for which the credit had been allowed, but because of some defects in the manufacturing proess or because of the inherent nature of the activity has to lose a part of the inputs in the waste and by-products etc. In the face of the specific relief given, I hold that any defective product which emerges in the manufacturing process has to be given the status of waste or by-product and the credit to be taken in respect of the inputs contained therein has to be taken to be available to the appellants. In view of this I find no infirmity in the lower appellate authority s order and I uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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