Waste and scrap of paper and paperboard were not dutiable; classification under Heading 47.02 was rejected.

Waste and scrap of paper and paperboard generated during manufacture were held not to be a distinct excisable product from the original input material. Applying a prior Tribunal view, the reasoning was that taxing such scrap would effectively amount to double taxation of the same material, so the proposed classification under Heading 47.02 was not accepted. The waste and scrap were therefore not dutiable, and the issue was decided in favour of the assessee.

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Issues: Whether waste and scrap of paper and paperboard generated during manufacture and cleared without payment of duty were dutiable and classifiable under Heading 47.02.

Analysis: The dispute turned on whether the waste and scrap arising in the course of manufacture constituted a product different from the original paper and paperboard used as input. A prior Tribunal decision on similar facts had held that such small pieces of paper and paperboard were not a distinct product and that levy of duty on them would amount to taxation of the same product twice. In the absence of any contrary decision, that view was followed, and the proposed classification under Heading 47.02 was not accepted.

Conclusion: The waste and scrap of paper and paperboard were not dutiable and could not be classified under Heading 47.02; the issue was decided in favour of the assessee.

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