Aluminium scrap removal for job work: Rule 57F(2) permitted despatch without duty where procedure was followed.

Aluminium scrap generated during manufacture of cans could be sent to job workers without duty if the procedure under Rule 57F(2) was followed, and the scheme did not confine the manufacturer to only the scrap-specific route under Rule 57F(5). The text states that Rule 57F(2) permitted despatch of such scrap for recycling, while Rule 57F(5) operated as an alternative scrap-removal provision on payment of duty. A Board circular was also read as supporting removal to a job worker under Rule 57F(2). On that basis, the duty demand on despatch of the aluminium scrap was held unsustainable.

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Issues: Whether aluminium scrap generated during manufacture could be sent to job workers without payment of duty under Rule 57F(2), or whether such removal was permissible only under the scrap-specific procedure under Rule 57F(5).

Analysis: The scrap arose in the course of manufacturing aluminium cans and was sent for recycling to job workers. The order held that the scheme did not restrict the manufacturer to only one route. Despatch of aluminium scrap could be effected under Rule 57F(2) if the prescribed procedure was followed, or under Rule 57F(5) as a scrap-removal provision on payment of duty. The Board circular relied on also supported the view that scrap could be sent to a job worker under Rule 57F(2).

Conclusion: The demand for duty on the despatch of aluminium scrap was not sustainable and the appeal was allowed.

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