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TMI Blog1996 (4) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from the factory for home consumption on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such inputs under Rule 57A. (2) Notwithstanding anything contained in sub-rule (1), a manufacturer may, with the permission of the Collector of Central Excise and subject to such terms and conditions and limitations as he may impose, remove the inputs as such, or after the inputs have been partially processed during the course of manufacture of final products, to a place outside [the factory, - [(a) for the purposes of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture of the final product or remove the same without payment of duty under bond for export, and return the same to his factory for further use in the manufacture of the final product, provided that the waste, if any, arising in the course of such operation is also returned to the said factory; (b) for the purpose of manufacture of intermediate products necessary for the manufacture of the final products and return the said intermediate products to his factory for further use in the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worth the duty payable thereon, the duty payable thereon being remitted : Provided that such waste may be destroyed by the manufacturer governed by Chapter VIIA after informing the proper officer in writing regarding the quantity of such waste and the date on which he proposes to destroy, at least seven days in advance and after observing all such conditions as may be prescribed by the [Collector of Central Excise] by a general or special order with regard to the manner of disposal of such waste. (5) No part of the credit of duty allowed shall be utilised save as provided in sub-rule (3). [(6) On an application made by a manufacturer, the Collector may, subject to such conditions and limitations as he may impose, permit a manufacturer having credit in his account in form RG 23A and lying unutilised on account of shifting of the plant or factory, belonging to the manufacturer, to another site, to transfer the credit in the account aforesaid to such factory of the same manufacturer.]" The ld. lower appellate authority following the ratio of the decision reported in 1993 (63) E.L.T. 633 (Tribunal) in the case of Chloride Industries Ltd. v. Collector of Central Excise, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned waste, in my considered view, has to come under the purview of the provisions of Rule 57F(2). Definitely there can be a clear line of distinction and difference in the movement of waste cleared on sale to a customer, and that removed to a job worker for the purpose of refining and reconditioning etc., and getting back in the form of rods after the intended recycling operations as in the present case. In the former case, as the waste is removed once and for all since the same is no longer required, the movement of the same is covered under Rule 57F(4). Whereas, in the latter case, the same is removed in order to undergo the intended processes as contemplated in Rule 57F(2) at the hands of the job worker and returned back in the form of rod, as stated earlier, and hence the movement has to be regulated under the provisions of Rule 57F(2) of the Central Excise Rules, 1944. Rule 57F(2) of the Rules permits the manufacturer to remove with the permission of the Collector of Central Excise, inputs as such, or after the inputs have been partially processed during the course of manufacture of final product" at a place outside for the purpose of repairs, refining, recondi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (1) The Collector (Appeals) has failed to see the true scope of the Rule 57F(2). As per Rule 57F(2), a manufacturer may remove the inputs as such or after the inputs have been partially processed during the course of manufacture of final products and hence the waste and scrap which has arised from the processing would not be covered within the ambit of inputs or after it is partially processed . Hence, the order of Collector (Appeals) is not correct in law. (2) The language of a statute must receive a strict construction and there can be no room for intendment or presumption and regard must be had to the clear meaning of words. When the language of a statute is clear and unambiguous, it cannot be strained and stretched so as to nullify the effect of the provision. The Collector (Appeals) failed to see that the scrap arisen in the course of manufacture would fall within the purview of 57F(4) as it specifically relates to any waste arising from the processing of inputs in respect of which credit has been taken and hence clearance of such waste and scrap would be governed by Rule 57F(4) only. (3) As per Rule 57F(2), only the inputs as such or after the same has been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the items in respect of which Modvat will be available, the conditions precedent to be satisfied for the purpose of availing the Modvat credit, the circumstance under which no Modvat credit will be available, the mode of utilization of the Modvat credit, the action for payment of duty in case the inputs without being utilized are cleared from the factory, the transfer of inputs for reprocessing etc., and how the waste etc., arising as a result of inputs is to be treated and also the necessary mechanism for recovery of credit in case the same is irregularly taken or utilized. These provisions of the rules are to be interpreted on their own terms. Rule 57F(4) specifically provides for the manner in which the waste arising as a result of processing or use of inputs has to be treated for excise purposes. There are three modes for the same provided under the rule is either it has to be cleared on payment of duty or without payment of duty if it is cleared for certain notified purpose as notified or be destroyed. Once, the product obtained after the use of the input is identified as waste, in law the same can be cleared and dealt with only in the manner specifically provided for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed clearances of the scrap duty free. We, therefore, proceed to examine the provisions of law to arrive at a conclusion whether in terms of that the benefit as allowed in terms of the trade notice issued is admissible. Rule 57F(2) under which the benefit of removal without payment of duty was allowed stipulating that the inputs in respect of which MODVAT Credit has been taken can be removed as such or after the inputs have been partially processed during the course of manufacture of the final products to a place outside factory for certain specified purposes as set out under sub-rules (a) and (b) of Rule 57F(2). Rule 57F(2) permits only removal of the inputs as such or after these have been partially processed. Scrap generated during the course of manufacture of the inputs which have been utilised for the manufacture of finished products in the factory cannot by itself be treated as input nor as partially processed input. It, in fact, is one of the by-products generated during the course of manufacture of the finished product. Permission allowed under Rule 57F(2) therefore was misconceived. The Legislature has made specific provision for the treatment of the scrap under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch in that case has held as under :- Rule 57F(2) of the Rules permits the manufacturer to remove with the permission of the Collector of Central Excise, inputs as such, or after the inputs have been partially processed during the course of manufacture of final product" at a place outside for the purpose of repairs, refining, reconditioning or carry out any other operation necessary for the final product or for purpose of manufacture of intermediate product, necessary for manufacture of final products. What the appellants have been doing is to send the waste and scrap generated from the inputs during the process of manufacture for being re-converted into ingots and utilise such ingots as input. This could be taken as process of reconditioning of the inputs. No specific meaning is given to the word recondition for the purpose of interpretation of the Rules and hence falling back upon the dictionary meaning, in the Chambers twentieth century dictionary, the word recondition is shown to mean to restore to original or sound conditions and in Websters dictionary it is shown as to restore to good condition . Waste and scrap being not a new product coming into existence but emergi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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