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TMI Blog2007 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct in name, character and use for the purpose of levy of duty. Therefore, it was held that no duty was chargeable. 2. Background facts in a nutshell are as follows: During investigation of the accounts of M/s Wimco Ltd. Bareilly, it transpired that the respondent was using paper and paper board for the manufacture of printed paper board boxes. During the course of manufacture of such boxes, waste/scrap/parings are generated, it was alleged that this waste was classifiable under Chapter sub-heading 4702.90 of Central Excise Tariff Act, 1985 (in short the 'Tariff Act'). Scrutiny of records revealed that the respondent was selling this waste/scrap/parings. It was also noticed that they did not declare transactions of waste/scrap/parings, and did not file classification list under Rule 173- B of the Central Excise Rules, 1944 (in short the 'Rules') and did not issue any invoices prescribed under Rule 52-A. Accordingly, a show cause notice (in short 'SCN') was issued to the respondent asking it to explain as to why duty amounting to Rs. 23,20,000/- should not be demanded and why penalty should not be imposed and why interest should not be charged. In reply to the SCN, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p/paring and there is specific heading for these items in the Central Excise Tariff and, therefore, the items are classified distinctively under Chapter heading 470 It was submitted that as a result of manufacture, waste/scrap and paper board come into existence which are distinct in name, character and use and, therefore, dutiable. 6. Tribunal noted that the Chapter Heading 4702.90 of the Schedule to the Tariff Act reads "Recovered (waste and scrap) paper or paper board, and is not "recovered waste or scrap". In the instant case, whatsoever is generated in the process of manufacture of match boxes is paper and paper boards in small pieces. This paper and paper board are used as inputs and continue to be paper and paper board when they appear as waste/scrap/parings. Charging of duty tantamounts to charging of duty on the same product twice. CEGAT also noted that in the instant case there is no value addition. 7. In support of the appeal, learned counsel for the appellant submitted that effect of classification list filed under Rule 173B has not been considered and there is a sale of waste/scrap/parings. 8. The Commissioner observed that the benefit of exemption, under N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable, if it is otherwise not. An article is not exigible to tax only because it may have some saleable value. 19. It may be that dross no longer answers the description of "waste and scrap" in view of the changes made in the Tariff, It is, however, almost well-settled that even if some percentage of metal is found in the dross the same in absence of something more in the entry would not be rendered as an excisable article. This Court in Indian Aluminium (supra) in fact noticed that some amount of metal is found in dross and skimming. A distinction, however, was made that dross and skimming are not metals in the same class as 'waste or scrap'. Even assuming that dross having a high percent age of metal is a marketable commodity the question, in our opinion, would arise as to whether the same can be said to be a manufactured product. The term 'manufacture' implies a change. Every change, however, is not a manufacture. Every change of an article may be the result of treatment, labour and manipulation. But manufacture would imply something more. There must be a transformation; a new and different article must emerge having a distinctive name, character or use. [See Union of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "residue resulting from the treatment of fatty substances" excisable, duty has to be paid on "spent earth". In other words, what is submitted is that merely because a good falls within one of the Tariff items it becomes excisable. 5. In support of their submission, reliance in placed on the case of Lal Wollen Silk Mills (P) Ltd., Amritsar v. Collector of Central Excise, Chandigarh, [1999 (4) SCC 466]. In this case the question was whether excise duty was to be paid on dyed worsted woolen yarn made from duty paid worsted woolen grey yam. It was argued that there was no manufacture. The Court however held as follows: "Admittedly both "dyed yarn" and "grey yarn" are covered by two separate distinct heads of tariff items with different duty. So this itself recognizes them to be two different goods with separate levy. In this view of this it cannot be urged that there is no manufacture of "dyed yarn" from the "grey yarn". Undoubtedly this authority appears to support the contention which is raised. 6. However, it appears to us that the observations made in this authority are "per incuram". In so observing, the decision of a larger Bench of this Court in the case of Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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