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TMI Blog2001 (12) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants resisted the demands in respect of waste and scrap of iron and steel in the proceedings before the lower authority contending mainly that the appellants were a primary manufacturer of aluminium and that they do not carry out any manufacturing activity on iron and steel. Their submission was that in such a situation the question of excise duty payment on waste and scrap of iron and steel did not arise. The appellants conceded the duty demand of about Rs. 1.32 lakhs in respect of aluminium waste and scrap. Detailed explanation about the source of the iron and steel waste and scrap and as to how they were not liable to duty was also offered in the adjudication proceedings. But to no avail. Appellants have raised the same defence in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 alone is liable to duty. According to them, all other kinds of waste are not liable to duty of excise at all. With regard to waste and scrap under Sl. No. 2 of the Table, the appellants' explanation is that remnants of duty paid steel arise when duty paid steel brought from outside is used in various parts of the plant for repair etc. Such remnants are re-rollable materials and are not waste and scrap. With regard to waste and scrap at Sl. No. 3, appellants have pointed out that the demolition of old civil constructions in the factory premises, yields iron and steel items, which constituted part of the buildings, and these are retrieved as waste and scrap. These waste and scrap are not the result of any manufacture and are not excisable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE v. Electro Steel Casting Ltd. [1999 (114) E.L.T. 243] (f) CC CE v. Orient Cerwool Ltd. [1997 (94) E.L.T. 546] (g) Modi Rubber Ltd. v. UOI [1987 (29) E.L.T. 502] (h) Wipro Limited v. CCE [2000 (117) E.L.T. 713] (i) Diesel Components Works v. CCE [2000 (120) E.L.T. 648 (T) = 2000 (40) RLT 641] 5. As against the above submissions of the appellants, ld SDR has pointed out that from 1994 onwards capital goods are eligible for Modvat credit and it was required to be verified as to whether the wastes and scrap in question arose from capital goods on which Modvat credit had been taken by the appellants. He, therefore, urged that the case be remanded for verification on this score. The learned Counsel for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te only restricts to the scrap and waste originated in the course of the dismantling of the locomotives. Admittedly, the scrap and waste originated during the course of dismantling of the locomotives is different and distinct item from the locomotives. Such scrap of iron and steel are classifiable under Heading No. 72.04 of said Schedule and that of aluminium is classifiable under Heading No.76.02. In view of this I am of the opinion that the waste originated during the course of dismantling of the locomotive is also excisable goods and the process of dismantling amounts to manufacture." The Commissioner proceeded to levy duty on such quantity of scrap and waste relying on the decision of the Calcutta High Court in M/s. S.S. Jain Co. re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with law." Viewed from the settled legal position, the only waste and scrap of iron and steel of which the appellants was liable to pay duty was the waste and scrap valued at over Rs. 1 lakh figuring at Sl. No. 1. The appellants do not contest the duty demand with regard to such waste and scrap. Rest of the waste and scrap of iron and steel was not liable to any duty at all. Same is the position in respect of the waste and scrap of other metals also. Accordingly, the impugned order is modified to the extent of setting aside the duty demand in respect of all goods figuring under Sl. Nos. 2 to 9 on the Table at pages 2 and 3 of this order. Penalty imposed is also reduced to Rs. 1 lakh. Appeal is ordered in the above terms. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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