Exemption for waste and scrap denied where factory also manufactures other excisable goods under the notification proviso

Notification No. 89/95-C.E. did not extend exemption to waste, parings and scrap cleared from a factory that also manufactured other excisable goods, because the proviso expressly excluded such clearances. Although the scrap arose in the course of making exempted goods, the assessee's simultaneous manufacture of non-exempt excisable goods brought the case within the prohibition in the proviso. The exemption claim therefore failed, and the waste and scrap remained outside the notification's benefit.

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Issues: Whether the benefit of Notification No. 89/95-C.E. dated 18-5-1995 was available to waste and scrap generated from the manufacture of exempted goods when other excisable goods were also manufactured in the same factory.

Analysis: The notification exempted waste, parings and scrap arising in the course of manufacture of exempted goods, but its proviso expressly barred its application to waste, parings and scrap cleared from a factory in which any other excisable goods other than exempted goods were also manufactured. The assessee admittedly manufactured exempted goods as well as other excisable goods during the relevant period, bringing the clearances within the prohibition contained in the proviso.

Conclusion: The exemption was not available and the assessee's claim failed.

Final Conclusion: The appeal was devoid of merit because the proviso to the exemption notification excluded the disputed waste and scrap from the benefit of exemption.

Ratio Decidendi: Where an exemption notification contains an express proviso excluding clearances from factories manufacturing both exempted and other excisable goods, the exemption cannot be claimed for waste and scrap arising from the manufacture of exempted goods in such a factory.

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