Excise duty on maintenance scrap rejected where MS waste arose incidentally during repair work and no manufacturing was involved.

MS scrap, borings and turnings generated incidentally during repair and maintenance of plant and machinery were not liable to central excise duty because the activity was not manufacturing iron and steel products, and no input credit had been taken on the items used for the repairs. The waste arose only as a by-product of maintenance work, so the basis for treating it as excisable could not be sustained.

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Issues: Whether MS scrap, borings and turnings generated in maintenance and repair work were liable to central excise duty.

Analysis: The appellant was engaged only in repair and maintenance of plant and machinery and was not manufacturing iron and steel products. The scrap and turnings arose incidentally during such maintenance work. It was also not disputed that no credit had been taken on the items used for the repair and maintenance activity. On these facts, the basis adopted below to treat the waste as excisable did not sustain.

Conclusion: MS scrap, borings, turnings and similar waste generated in maintenance and repair work were not liable to duty.

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