1996 (11) TMI 73 - SC - Central Excise

Supreme Court rules waste transformation is 'manufacture' under Central Excises and Salt Act.

The Supreme Court concurred with the Tribunal's finding that the process undertaken by the appellant constituted 'manufacture' under Section 2(f) of the ... Waste generating Issues involved: Determination of whether the process undertaken by the appellant constitutes 'manufacture' under Section 2(f) of the Central Excises and Salt Act.The judgment pertains to an appeal where the appellant manufactures polyester fibres and tops from duty paid waste, which is covered by item 18 of the 1st Schedule of the Act. The appellant argued that the waste generated during the manufacturing process was not liable to duty again as the input and output were identical waste. The Customs, Excise & Gold (Control) Appellate Tribunal held that there was a definite process of 'manufacture' u/s 2(f) of the Act, as the resultant waste, although having similar physical and chemical properties as the original waste, underwent a reaction of depolymerisation and repolymerisation, making it a distinct product. The Tribunal concluded that the physical and chemical characteristics being the same, the resultant waste was indeed manufactured. The Supreme Court, concurring with the Tribunal's findings, held that since the physical and chemical characteristics of the original waste and the resultant waste were the same, the resultant waste could not be considered as a distinct or different commodity from the original input. Therefore, the Court allowed the appeal, setting aside the judgment and order under appeal, with no order as to costs.