Waste product classification failed where old PVC footwear bought for recycling was not the manufacturer's own waste.

Old PVC shoes and chappals bought from hawkers and kabaris were not "waste products" within entry 32 because that expression, given its ordinary meaning, covers goods that have become waste in the manufacturer's own production process. The Court held that purchased used footwear later converted into granules was merely acquired material, not the assessee's own manufacturing waste, so the tax classification failed. It also ruled that the Commissioner's view under section 35 could not cure notices based on the wrong classification. The notices were therefore illegal and liable to be quashed.

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Issues: Whether old PVC shoes and chappals purchased by the assessee from hawkers and kabaris constituted "waste products" within entry 32 of the notification dated September 7, 1981 so as to be taxable at the point of sale to consumer, and whether the impugned assessment notices were sustainable.

Analysis: The expression "waste products" was not defined in the Act, so the Court applied its ordinary meaning. On that meaning, a waste product is something that has become waste in the manufacturing process of the producer concerned. The old PVC shoes and chappals purchased by the assessee were not waste products of the assessee's own manufacture; they were merely purchased goods obtained from intermediaries and then used as raw material after conversion into granules. The reliance placed on earlier authority dealing with different facts was rejected because the goods there were waste products of a manufacturer sold onward as such. The Court also held that the Commissioner's view under section 35 could not validate notices that proceeded on an incorrect classification of the goods as waste products.

Conclusion: The old PVC shoes and chappals did not fall within entry 32 as waste products, and the notices issued on that basis were illegal and liable to be quashed.

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