Retained character and purity govern tariff classification of worn out silver targets, excluding them from waste and scrap treatment.

Worn out Silver Targets used in the manufacture of recordable compact discs were treated as silver, not waste and scrap, because they retained their purity and essential character despite losing their original form. The Tribunal applied the principle that material remains outside scrap classification where it can still be re-melted or re-used and has not lost intrinsic value. On that basis, the goods fell under Chapter Sub-heading 7101.31 rather than 7101.80, and the duty and penalty were set aside with consequential relief.

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Issues: Whether worn out Silver Targets, after depletion of silver in the manufacture of recordable compact discs, were classifiable as scrap under Chapter Sub-heading 7101.80 or as silver under Chapter Sub-heading 7101.31, and whether the duty and penalty could be sustained.

Analysis: The Tribunal found the facts to be materially similar to the earlier decision dealing with remnants of silver strips. The worn out Silver Targets had not lost their purity; they had merely lost their original shape and continued to retain silver content. On the accepted understanding of scrap, an item is waste only when it has lost intrinsic value, which was not the position here. The reasoning applied was that a remnant retaining the character of silver and capable of re-melting or re-use cannot be treated as waste and scrap merely because it is no longer usable in the same form.

Conclusion: Worn out Silver Targets were held classifiable under Chapter Sub-heading 7101.31 and not under Chapter Sub-heading 7101.80. The demand and penalty were set aside, and the appeal was allowed with consequential relief.

Ratio Decidendi: Goods that retain their essential character and purity after use are not to be treated as waste and scrap for tariff classification merely because their original form has been altered or exhausted.

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