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TMI Blog1994 (2) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... edit taken by them in respect of inputs used by them in the manufacture of Dry Cells and which is relatable to the defective Cells which are destroyed is liable to be disallowed, the same not being covered by Rule 57D(1) of the Central Excise Rules. It was observed by the Collector in his impugned order that the Waste and Scrap do not arise during the course of manufacture of Dry Cells but finished batteries have come into existence and the Waste and Scrap are nothing but rejects of final products. Shri Lakshmi Kumaran, learned Counsel for the appellants set out the facts of the case as stated in the appeal memorandum. He submitted that the Collector had erred in holding that the Dry Cells which are rejected during quality control checks an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the Supreme Court in Swadeshi Polytex Limited v. Collector of Central Excise reported in 1989 (44) E.L.T. 794 = 1990 (28) E.C.R. 289 S.C. setting aside the Tribunal's decision in disallowing the Credit under Notification No. 201/79-C.E., dated 4-6-1979 in respect of inputs corresponding to non-dutiable by-product methanol emerging in the manufacturing process. He, therefore, pleaded that the appeal be allowed. 2. Shri S. Dutt Majumdar, learned Senior Departmental Representative opposed the arguments advanced by the learned Counsel. He supported the order. He referred to the Tribunal's decision in D.S. Screen Pvt. Ltd. v. Collector of Central Excise holding that testing was not held to be a stage attributable to the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated to be just after final testing and inspection and not before it. Thus if any cell is found to be not passing the test during such checking, that is a stage before manufacture is completed. If such cells, which fail the test, are to be destroyed, they are Waste arising during the manufacture. Even before they are crushed and destroyed they are Scrap and Waste as they are unfit for marketing. Destroying them is only for the purpose of ensuring that they do not even by mistake, enter the market. Such destruction is in conformity with Rule 57F(4)(c). The practice being followed in Madras and Hyderabad Collectorates for a similar situation is correct, in our view. The cases cited by the learned Senior Departmental Representative while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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