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TMI Blog2017 (7) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... s & Scrap'. The Department was of the view that the appellant is liable to pay duty on such waste and scrap as these are leviable to duty under Chapter Note 8 (a) of Section XV of Customs as well as Central Excise Tariff Act. A Show cause notice was issued placing the above allegations and proposing to demand duty, interest and also to impose penalties. After due process of law, the adjudicating authority confirmed the duty demand of Rs. 54,197/- along with interest and imposed equal penalty. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of the appellant, Ld. Counsel Shri S. Muthu Venkataraman, submitted that the appellant has cleared only components of machinery due to wear and tear of the mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tariff entry in the Schedule to the Tariff Act and are manufactured goods in the terms of Section 2(f) of the Act. Therefore, the conditions contemplated under Section 2(d) and Section 2(f) has to be satisfied conjunctively in order to entail imposition of excise duty under Section 3 of the Act. The manufacture in terms of Section 2(f) includes any process incidental or ancillary to the completion of the manufactured product. This any process can be a process in manufacture or process in relation to manufacture of the end product, which involves bringing some kind of change to the raw material at various stages by different operations. The process in manufacture must have the effect of bringing change or transformation in the raw ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is the end product. The issue of getting a new identity as M.S. Scrap and Iron Scrap as an end product due to manufacturing process does not arise for our consideration. The repairing activity in any possible manner cannot be called as a part of manufacturing activity in relation to production of end product. Therefore, the M.S. scrap and Iron scrap cannot be said to be a by-product of the final product. At the best, it is the by-product of the repairing process which uses welding electrodes, mild steel, cutting tools, M.S. Angles, M.S. Channels, M.S. Beams etc." Following the dictum by the Hon'ble Apex Court in the case of Grasim Industries Ltd., we find that the demand is unsustainable. Accordingly, the impugned order is set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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