Non-classifiable waste oil is not excisable; duty on clearance as waste and scrap applies only to classifiable goods.

Waste oil generated from the use of capital goods was held not to be excisable because it was a mixture of used oils, dirt, water and other residues and could not be classified under any heading in the Central Excise Tariff. The duty liability on clearance as waste and scrap arises only where the cleared item is a classifiable excisable commodity; absent a tariff entry, no central excise duty is payable. On that basis, the waste oil remained non-dutiable on clearance and the Revenue's appeal failed.

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Issues: Whether waste oil generated from use of capital goods was excisable and liable to duty on clearance as waste and scrap.

Analysis: The waste oil consisted of a mixture of used oils, dirt, water, and other residues, and could not be classified under any heading in the Central Excise Tariff Schedule. Though the statutory scheme contemplated recovery of duty when capital goods were cleared as waste and scrap, that liability could arise only where the cleared product was a dutiable excisable commodity. The absence of a classifiable tariff entry meant that the product did not attract central excise duty.

Conclusion: The waste oil was not excisable and no duty was payable on its clearance; the Revenue's appeal failed.

Ratio Decidendi: Duty on clearance as waste and scrap is payable only if the cleared item is a classifiable excisable good; a non-classifiable mixture of used oils and impurities is not dutiable.

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