Excise duty on paper waste from cigarette manufacture fails absent a specific statutory provision requiring duty on scrap.

Waste and scrap of paper generated during cigarette manufacture was not chargeable to central excise duty because no manufacturing process was undertaken on the waste itself to attract duty. The Tribunal noted that the Cenvat Credit Rules, 2001 contained no specific provision requiring payment of duty on waste and scrap arising during manufacture, unlike the earlier Rule 57F of the Central Excise Rules, 1944. In the absence of such a statutory mandate, the paper waste was held not dutiable.

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Issues: Whether waste and scrap of paper generated during the manufacture of cigarettes was liable to central excise duty.

Analysis: The Tribunal held that no manufacturing process was undertaken in respect of the waste and scrap so as to attract excise duty on the paper waste arising during cigarette manufacture. It noted that the Revenue did not dispute the assessee's contention that the Cenvat Credit Rules, 2001 contained no provision requiring payment of duty on waste and scrap arising during manufacture of the finished product, whereas such a provision had existed under Rule 57F of the Central Excise Rules, 1944.

Conclusion: The waste and scrap of paper generated during the manufacture of cigarettes was not chargeable to excise duty, and the assessee's appeal succeeded.

Ratio Decidendi: In the absence of a specific statutory provision requiring duty on waste and scrap arising during manufacture, such waste is not dutiable merely because it emerges in the course of producing the final excisable goods.

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