Waste and scrap exemption denied where the same factory also manufactured other dutiable excisable goods.

Waste and scrap arising in the manufacture of exempted goods were not eligible for exemption under Notification No. 89/95-C.E. where the same factory also manufactured other dutiable excisable goods. The notification exempted such waste and scrap only in limited circumstances, and its proviso denied the benefit if the factory clearing the scrap produced any excisable goods other than exempted goods. As the notification treated the waste and scrap as dutiable but for the exemption, the presence of other dutiable manufacture in the same factory attracted the proviso and the exemption was unavailable.

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Issues: Whether waste and scrap arising in the course of manufacture of exempted goods were eligible for exemption under Notification No. 89/95-C.E. dated 18-5-1995 when the factory also manufactured other dutiable excisable goods.

Analysis: The notification granted exemption to waste and scrap arising in the course of manufacture of exempted goods, but its proviso withheld the benefit where the factory from which the waste and scrap were cleared also manufactured any other excisable goods other than exempted goods. The notification itself proceeded on the basis that such waste and scrap were dutiable goods but for the exemption. Since dutiable goods were also manufactured in the same factory, the proviso squarely applied and the exemption could not be availed.

Conclusion: The exemption was not available and the duty demand was upheld.

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