Captive consumption of scrap under Rule 57S(2)(c) was not dutiable where the provision applied to sales as waste and scrap.

Rule 57S(2)(c) of the Central Excise Rules, 1944 was construed as applying to capital goods sold as waste and scrap, not to clearance for captive consumption. The Tribunal held that the approach under Rule 57CC could not be imported into Rule 57S(2)(c) because the two provisions operate in different fields and are not pari materia. The contrary Revenue decisions were found inapplicable on the facts and statutory scheme, and the unchallenged finding that the scrap was outside the excise net supported the conclusion. Duty was therefore not payable on the impugned clearance.

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Issues: Whether duty was payable under Rule 57S(2)(c) of the Central Excise Rules, 1944 on waste and CI moulds cleared for captive consumption when Modvat credit had been availed on the capital goods.

Analysis: The rule relied upon by the Revenue was construed as applying where capital goods are sold as waste and scrap, whereas the present clearance was for captive consumption and not a sale. The Tribunal held that the reasoning adopted under Rule 57CC of the Central Excise Rules, 1944 could not be transplanted to Rule 57S(2)(c), because the two provisions operate in different fields and are not pari materia. The contrary decisions cited by the Revenue were found inapplicable on facts and on the statutory scheme. The unchallenged finding that the scrap was outside the excise net also supported the conclusion.

Conclusion: Duty was not payable on the impugned clearance under Rule 57S(2)(c), and the Revenue's appeal failed.

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