Manufacture test for waste scrap: molten and broken glass was held not to be excisable goods.

Waste or scrap arising during manufacture is not treated as manufacture of a new and distinct article unless it acquires a separate name, character or use, or the tariff expressly brings it to duty. Applying that principle, molten and broken glass cleared as 'Bhagar' was held not to be excisable goods under Item 23A(4) of the Central Excise Tariff Schedule. The earlier view treating broken glass as manufactured goods was not followed in light of the Delhi High Court's reasoning. The challenge to the Collector (Appeals) order therefore failed, and the finding that no excise duty was payable on the glass waste was sustained.

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Issues: Whether 'Bhagar' i.e. molten and broken glass cleared from the factory was liable to excise duty as goods under Item No. 23A(4) of the Central Excise Tariff Schedule.

Analysis: The Tribunal followed the Delhi High Court's ruling that waste or scrap emerging in the course of manufacturing the end-product is not the result of manufacture of a new and different article. Such refuse is generated during the manufacturing process and does not, by itself, acquire the character of excisable goods unless the tariff specifically so provides. The earlier Tribunal view treating broken glass as manufactured goods was not followed in light of the High Court's later reasoning.

Conclusion: 'Bhagar' was not excisable goods and was not liable to levy of excise duty.

Final Conclusion: The appeal challenging the Collector (Appeals)' order failed, and the finding that no duty was payable on the disputed glass waste was sustained.

Ratio Decidendi: Waste or scrap arising in the course of manufacture, without bringing into existence a new and distinct article having a distinctive name, character or use, is not manufacture and is not excisable unless the tariff expressly taxes it.

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