Excise duty on manufacturing waste cannot be demanded absent a specific Cenvat recovery provision.

Excise duty could not be demanded on unusable waste and scrap arising during the manufacture and packing of cigarettes because the applicable Cenvat regime contained no specific charging or recovery provision for such waste. The Tribunal followed earlier decisions, including the assessee's own prior case, and distinguished the erstwhile Rule 57F of the Central Excise Rules, 1944, which had expressly dealt with such situations. On that footing, the waste material was held not liable to duty and the impugned order was set aside in favour of the assessee.

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Issues: Whether duty was payable on unusable waste arising during the manufacture and packing of cigarettes.

Analysis: The dispute was treated as no longer res integra. The Tribunal relied on earlier decisions holding that no excise duty could be demanded on waste and scrap arising in the course of manufacture where the governing Cenvat regime did not contain a provision requiring payment of duty on such waste, unlike the erstwhile Rule 57F of the Central Excise Rules, 1944. The facts in the present case were found to be identical to the appellant's own earlier case, and the earlier view was followed.

Conclusion: Duty was not payable on the waste material, and the impugned order was set aside in favour of the assessee.

Ratio Decidendi: In the absence of a specific charging or recovery provision under the applicable Cenvat regime, excise duty cannot be demanded on waste and scrap arising during manufacture.

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