Plastic waste classification under Chapter 39.15 upheld, with duty to be recomputed on a cum-duty basis.

Polyethylene film waste and scrap emerging in the assessee's hands was treated as plastic waste and scrap classifiable under Chapter Heading 39.15 of the Central Excise Tariff Act and therefore liable to central excise duty. The Tribunal followed its earlier view that plastic waste and scrap, including polyethylene film scrap, falls within that heading, and rejected the argument that duty could not apply because the scrap did not arise during manufacture of the final product; the inputs were admitted to have been used in relation to that manufacture. The duty demand was to be recomputed on a cum-duty basis.

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Issues: Whether polyethylene film waste and scrap emerging at the assessee's hands was classifiable under Chapter Heading 39.15 of the Schedule to the Central Excise Tariff Act, 1985 and liable to central excise duty.

Analysis: The Tribunal followed its earlier decision holding that waste and scrap of plastic emerging at the assessee's hands falls under Chapter Heading 39.15, and that polyethylene film scrap is includable within plastic waste and scrap. The assessee's attempt to distinguish the position on the basis that the scrap did not arise in the course of manufacture of the final product was rejected, since the inputs were admitted to be used in relation to the manufacture of the final products. The duty demand, however, was required to be recomputed by treating the price as cum-duty price.

Conclusion: The issue was decided in favour of the Revenue; the impugned order was set aside and the appeals were allowed.

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