Waste and scrap from mineral water containers supported prima facie waiver of pre-deposit and stay of recovery.

Waste and scrap arising during filling, handling or breakage of plastic containers used for mineral water was treated as a prima facie non-dutiable consequence where it did not result in manufacture of a distinct excisable product. The Tribunal noted the assessee's reliance on earlier decisions concerning broken bottles and considered the Revenue's contention that plastic scrap was classifiable under Chapter Heading 39.15. On that basis, it granted unconditional waiver of pre-deposit and stayed recovery of the duty and penalty demand pending disposal of the appeal.

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Issues: Whether the assessee was entitled to unconditional waiver of pre-deposit and stay of recovery in respect of duty and penalty demanded on scrapped plastic containers used for filling mineral water.

Analysis: The Tribunal found a prima facie case in favour of the assessee by applying the principle that waste and scrap arising during filling, handling or breakage, and not resulting from manufacture of a distinct excisable product, may not attract duty. It noted the reliance placed on earlier decisions concerning broken bottles and the competing Revenue stand that plastic scrap was specifically classifiable under Chapter Heading 39.15.

Outcome: Unconditional waiver of pre-deposit was granted and recovery of the demand and penalty was stayed pending disposal of the appeal.

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