Partially processed plastic waste sent for job-work remained duty-free under the job-work provision despite being described as scrap.

Plastic waste and scrap generated during moulding from virgin granules was treated as a partially processed input rather than a distinct dutiable removal. When sent to a job worker for grinding into reusable granules and returned for further manufacture, the movement fell within the scope of Rule 57F(2)(b). The demand to treat the clearance under Rule 57F(3) and levy duty was not justified, because the material retained its input character despite being described as waste and scrap. The duty demand was therefore unsustainable, and the assessee obtained relief.

---

---

Issues: Whether plastic waste and scrap arising during manufacture, when sent to a job worker for grinding into reusable granules and returned for further manufacture, could be treated as partially processed input removable without payment of duty under Rule 57F(2), or whether duty was payable by treating the removal as governed by Rule 57F(3).

Analysis: The material removed, though described as waste and scrap, was generated from virgin plastic granules during the moulding process used to manufacture plastic containers. The material therefore retained the character of input that had undergone a manufacturing process and was properly regarded as partially processed input. Once sent to a job worker for conversion into reusable granules and returned for further manufacture, the removal fell within the permissive scope of Rule 57F(2)(b). In that situation, the insistence on duty by invoking Rule 57F(3) was not justified.

Conclusion: The removal of the plastic waste and scrap to the job worker did not attract duty and the assessee succeeded on the issue.

Final Conclusion: The duty demand was unsustainable and the orders of the lower authorities were set aside with consequential relief.

Ratio Decidendi: Material arising from manufacture that is itself a partially processed input may be sent to a job worker for further processing under the applicable job-work provision without payment of duty, notwithstanding its description as waste and scrap.

---