Re-rollable scrap classification: material for re-rolling, not remelting, cannot be treated as waste and scrap to deny exemption.

Re-rollable scrap used for further manufacture through re-rolling was not waste and scrap within the meaning of the exemption notifications because it was not material generally used for remelting. Binding departmental circulars clarified that waste and scrap of iron and steel covered only remelting-grade material, so the goods could not be reclassified as waste and scrap merely because they arose from broken or used material. The denial of exemption on that basis was therefore unsustainable, and the exemption remained available to the assessee.

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Issues: Whether re-rollable scrap used in the manufacture of iron and steel products could be treated as waste and scrap so as to deny exemption under the relevant notifications.

Analysis: The inputs used by the assessee were not materials requiring remelting and were used for further manufacture through re-rolling. The Board's clarifications and circulars stated that waste and scrap of iron and steel covers only material generally used for remelting and that re-rollable scrap does not fall within that description. Since the circulars were binding on the departmental authorities, the goods could not be classified as waste and scrap merely because they arose from broken or used material. Once the inputs were not waste and scrap, the denial of exemption on that basis could not be sustained.

Conclusion: The issue is answered in favour of the assessee. Re-rollable scrap is not waste and scrap for the purpose of the exemption notifications, and the benefit of exemption was available.

Ratio Decidendi: Binding departmental circulars governing tariff classification must be followed, and re-rollable scrap not meant for remelting cannot be treated as waste and scrap so as to deny exemption.

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