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TMI Blog2008 (12) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. Shri B.S. Suhag, DR, for the Respondent. [Order per : M. Veeraiyan, Member (T)]. This is an appeal against the order of the Commissioner (Appeals) No. 317-CE/BPL/2004, dated 29-9-04. 2. Heard both sides. 3. The appellant is a manufacturer of cement. They brought certain capital goods and took Modvat credit of duty paid on them and used the capital goods for considerable period time and thereafter, they were discarded as they were not usable any more for their purpose. The discarded machineries were sold as waste and scrap. The original authority held that the said waste and scrap movable and marketable and hence goods and that they have been manufactured by the appellant as waste and scrap and accordingly, confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap arising out of capital goods and discarding of old machinery is not liable to excise duty even if the manufacturer had availed Modvat credit on the capital goods and at the time of purchase of the machine is wrong and incorrect. 6.2 The relevant portion of the Commissioner (Appeals) order upholding the order of the original authority is reproduced below : 5. From the submission made by the appellant it is evident that they had availed Modvat credit on the obsolete/outlived machineries when these were received and removed the same as waste and scrap. I find that Section Note 8(a) of Section XV of CETA, 85 covers metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely useable as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue is that as the scrap in question is arising by cutting of the metal which are definitely usable as such, therefore as per Section 2(f) of the Central Excise Act the same amounts to manufacture. We find we are unable to agree with the contention of revenue. In the present case, the scrap in question is of old and used capital goods and it is not arising out of mechanical working of metals in the factory. The Tribunal in the decisions relied upon by the appellant specifically held that such scrap is not dutiable. In view of this, we find merit in the contention of appellant. Impugned order is set aside and appeals are allowed. 7. In the light of the above, we are not able to sustain the orders of the authorities below and accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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