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TMI Blog1992 (9) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... redit under the MODVAT Scheme. For the purpose of manufacture of their final products, they purchased duty paid lead ingots and availed of credit for duty paid thereon. During the manufacturing process, substantial quantity of waste and scrap arose, which initially they cleared availing the benefit of exemption vide Notification No. 33/81. As per their claim, at a later stage, they however, realised that such a waste and scrap could be utilised for manufacture of Batteries after conversion into ingots and hence under the general permission obtained for the removal of ingot vide Rule 57F of the Rules, they started removing the waste and scrap, following procedure laid down under Rule 57F(2) of the Rules, to the job-workers who converted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of manufacture of pistons, could be allowed removal vide Rule 57F(2) and pleaded that the ratio of the same could squarely apply to them. The adjudicating authority, after granting personal hearing came to the conclusion that, waste and scrap was a new dutiable commodity that came into existence during the course of manufacture of excisable goods from lead ingots and for removal thereof, provisions of Rule 57F(4) would stand attracted and not Rule 57F(2). Holding that the duty demanded would be payable, he however dropped the said demand holding that the extended period of limitation was not available. In any case, according to him the appellants had contravened the statutory provisions and were liable to imposition of penalty and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egisters and no doubt is cast as to correctness thereof. The ld. Advocate has pleaded that Rule 57F(2) of the Rules ought to be read wide enough as to cover such items which at one stage, was the part of the input, is used for re-conversion into the input, more particularly in view of CBEC Circular No. 15/44, (R No. 261/76/2/88 CX., dated, 19-4-1989) as published in CBEC Digest April, 1989 at Page 1-60, where aluminium scrap generated during the process of manufacture of Aluminium Pistons have been permitted availment of facility of the said provisions, when such a scrap is removed for conversion of ingots. He has also pleaded that the said circular, would, in letter and spirit, stand attracted here, and identical situation in relation to l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orage Batteries. There is also no challenge to the plea that the waste and scrap, the subject matter at issue is generated while utilising the inputs for the manufacture of final product. There is also no dispute that waste and scrap when cleared from the factory are chargeable to duty. 7. The waste and scrap so generated are the remnants emerging as a necessary consequence of the manufacturing activity undertaken over the lead ingots for bringing out the final product. Merely because the waste and scrap so generated has been made dutiable when sold, it cannot be said that new excisable product has been manufactured. The said approach of the authority below therefore does not sound plausible and cannot be sustained. 8. The main issue fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to restore to good condition . Waste and Scrap being not a new product coming into existence but emerging as remnants of the inputs, when sent out for reconversion into ingots themselves, the same would fall within the purview of Rule 57F(2) and provisions of Rule 57F(4) need not be resorted to. This view gets fortified by the Circular No. 15/89 of the CBEC where, in the identical situation arising in relation to Aluminium scrap and reconversion thereof in ingots, benefit of removal under Rule 57F(2) has been given. There is no mention in the Circular nor is anything brought on record to show that some special circumstances, distinct and not available to lead waste and scrap or in that case, to any such reconvertable scrap, existed requiri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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