By TIOL News Service

MUMBAI, MAY 16, 2017: THE appellant destroyed their final product namely aerated water. They have been granted remission of duty on such destruction. After destruction, aluminium cans i.e. packing material waste and scrap of aluminium emerged and same was sold as metal waste and scrap.

The department demanded and confirmed the CE duty on this waste and scrap.

The matter is before the CESTAT.

In their appeal memorandum, the appellant informed that the said scrap was not generated in the course of manufacture of finished goods and, therefore, the same is not dutiable. It is further submitted that on the entire goods which was destroyed, the excise duty was remitted, therefore, no duty can be demanded. Reliance is placed on the decision in Alembic Ltd - 2007-TIOL-1304-CESTAT-AHM.

The Bench after considering the submissions observed thus -

"5. I find that waste and scrap can be chargeable to duty only when it is arisen during the course of manufacture of final product. In the facts of the present case Aluminium waste and scrap has arisen as crushed aluminium cans generated during the destruction of already manufactured final product i.e. aerated water. Excise duty on the entire final product which contained aluminium cans which was also destroyed has been remitted in terms of Rule 21 of Central Excise Rules, 2002. In this undisputed facts, it is very clear that waste aluminium cans is not generated during the course of manufacture of final product whereas the same was arisen after destruction of the already manufactured goods therefore excise duty cannot be demanded on aluminium waste and scrap which is not resultant of manufacturing activity…."

The impugned order was set aside.

(See 2017-TIOL-1623-CESTAT-MUM)