Waste and scrap classification requires proof of tariff identity and marketability; refuse mixed with non-metallic is not excisable.

Waste material cleared from manufacture was held not to qualify as waste and scrap under Heading 7204.90 where it consisted mainly of sand, clay, coke fine and charcoal fine with only limited metallic content. The record did not show that the material had the essential character of ferro alloys, was recognised in trade as waste and scrap of ferro alloys, or was marketable as excisable goods. The burden remained on the Revenue to prove that the goods fell within the tariff entry and were liable to central excise duty, and that burden was not discharged.

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Issues: Whether the waste material cleared by the assessee was classifiable as waste and scrap under Heading 7204.90 and liable to central excise duty.

Analysis: The Department failed to adduce evidence that the impugned material had the essential character of ferro alloys or that it was understood in trade as waste and scrap of ferro alloys. The material was found to be a mixture largely consisting of sand, clay, coke fine and charcoal fine, with only a small metallic content, and the record did not establish marketability as excisable goods. The applicable note on waste and scrap contemplated metal waste arising from manufacture or mechanical working of metals and metal goods, whereas the goods in question were treated as refuse or rubbish removed from the manufacturing process. The burden to show that the goods were excisable and fell within the tariff entry remained on the Revenue and was not discharged.

Conclusion: The material was not waste and scrap classifiable under Heading 7204.90 and no excise duty was payable on it; the finding was in favour of the assessee.

Final Conclusion: The demand and classification adopted by the Department were unsustainable, and the assessee was entitled to relief.

Ratio Decidendi: Mere sale of refuse or rubbish does not by itself make it marketable excisable goods; the Revenue must prove that the material answers the tariff description and satisfies the statutory test for waste and scrap.

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