Excisable scrap classification: scrap from plant expansion and machinery commissioning was held outside Section XV coverage.

Scrap generated during plant expansion, including erection, fabrication and commissioning of machinery, was treated as outside the scope of excisable scrap under Section XV of the Central Excise Tariff Act, 1985 because it did not arise from the manufacture or mechanical working of metals or metal goods. The text states that Section XV applies to metal waste and scrap becoming unusable from breakage, cutting, wear or similar causes, and not to scrap arising from construction or civil structures. On that basis, the demand was held unsustainable, the scrap was not dutiable, and the impugned order was set aside with consequential relief.

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Issues: Whether scrap generated during erection, fabrication and commissioning of machinery during plant expansion is dutiable as excisable scrap under Section XV of the Central Excise Tariff Act, 1985.

Analysis: The scrap in question was generated during plant expansion and the erection and commissioning of machinery, not from the manufacture or mechanical working of metals or metal goods. Scrap falling within Section XV is confined to metal waste and scrap arising from the manufacture or mechanical working of metals and metal goods and becoming unusable because of breakage, cutting up, wear or similar reasons. Scrap arising from construction or civil structures does not satisfy that description. Following the settled view applied in earlier decisions on identical facts, the demand could not be sustained.

Conclusion: The scrap was not dutiable. The impugned order was set aside and the appeal was allowed with consequential relief.

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