Incidental wire scrap from manufacture is not excisable where no separate manufacturing process creates it, and tariff classification cannot change that.

Waste and scrap of PVC insulated wires and copper wires generated as end cuttings during manufacture of integrated automobile wire harness sets was held not to constitute manufacture for central excise purposes. Because the scrap arose incidentally from inputs used in production, and not from any separate manufacturing process, it was not chargeable to central excise duty. The Department's classification under Chapter 7404 was also rejected on the facts, since tariff classification alone could not make non-excisable scrap dutiable. The demand was therefore unsustainable.

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Issues: Whether waste and scrap of PVC insulated wires and copper wires generated during the manufacture of integrated automobile wire harness sets are liable to central excise duty and classifiable under Chapter 7404 of the Central Excise Tariff Act, 1985.

Analysis: The waste and scrap in question consisted only of end cuttings of wires procured for use in the manufacture of the final product and did not arise from any separate manufacturing process. On those facts, the generation of such waste and scrap could not be treated as manufacture so as to attract excise duty. The classification adopted by the Department under Chapter 7404 was also not accepted as correct in the circumstances. The issue was covered by the Tribunal's earlier view that waste and scrap arising in the course of cable manufacture are not liable to central excise duty.

Conclusion: The waste and scrap was not chargeable to central excise duty and the Department's demand was unsustainable.

Ratio Decidendi: Waste and scrap that is merely incidental end cuttings from inputs used in manufacture, and does not itself arise from a manufacturing process, is not excisable and cannot be subjected to central excise duty merely by classification under a tariff heading.

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