Aluminium processing scrap: manufacture requires a new product, and residuary classification cannot override a specific tariff entry.

Aluminium processing waste arising during manufacture of conductors was treated as scrap and not as manufactured goods, because manufacture requires transformation into a new article with a distinct name, character or use. The Board applied that principle and held that mere processing waste sold as scrap did not satisfy the statutory concept of manufacture. It further noted that, even if a new product were assumed to emerge, the specific aluminium tariff entry would prevail over the residuary item because a residuary classification cannot be used where an enumerated entry reasonably applies. The scrap was therefore not classifiable under Tariff Item 68.

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Issues: Whether aluminium processing waste and scrap arising during manufacture of conductors was liable to be classified under the residuary Tariff Item 68 or under the specific tariff entry for aluminium in crude form, and whether such scrap amounted to manufactured goods.

Analysis: The Board found that the material in question was only processing waste disposed of as scrap and did not answer the statutory concept of manufactured goods. Applying the settled principle that manufacture requires transformation into a new and different article having a distinctive name, character or use, the Board held that mere processing waste sold as scrap could not be treated as goods manufactured in terms of the statute. It further held that, even if a new product was assumed to have emerged, the proper classification was under the specific aluminium entry and not the residuary item, since the residuary clause cannot be invoked where an enumerated item reasonably applies.

Conclusion: The scrap was not classifiable under Tariff Item 68 and the appeal succeeded in favour of the assessee.

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