Excise duty on manufacturing waste required express tariff coverage; scrap from nylon yarn production was not taxable before amendment.

Excise duty under Item 15A was not chargeable on waste or scrap arising during nylon yarn manufacture because the tariff entry, as it stood before the 1982 amendment, did not expressly include such material. Waste generated in the manufacturing process was not treated as a manufactured end-product merely because it emerged during production, and taxability could not be imposed by implication. The later amendment specifically bringing waste and scrap within the entry confirmed that the earlier wording was insufficient to cover them. The duty demand on the waste was therefore set aside in favour of the assessee.

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Issues: Whether excise duty was leviable on waste or scrap arising in the course of manufacture of nylon yarn under Item 15A of the First Schedule to the Central Excises and Salt Act, 1944, prior to the amendment specifically including waste and scrap.

Analysis: The liability to excise duty depends on the tariff entry expressly covering the goods sought to be taxed. Waste generated during the manufacturing process is not, by itself, a manufactured end-product, and it does not become dutiable merely because it emerges in the course of manufacture. Item 15A, as it stood before the 1982 amendment, did not include waste or scrap, whereas the later amendment specifically brought such material within the scope of the entry. The absence of an express inclusion in the earlier tariff entry meant that the authorities could not tax the waste on the footing adopted by them.

Conclusion: Excise duty was not leviable on the waste in question under Item 15A before the amendment, and the finding of duty liability was set aside in favour of the assessee.

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