Incidental scrap from timber sawing is not excisable goods merely because it has market value

Sawn paratty and saw dust arising incidentally during the sawing of timber logs were treated as scrap or waste, not as intentionally manufactured goods. The article states that a product is not excisable merely because it may fetch a price if it emerges only as an inevitable by-product in the manufacturing process. On that basis, such incidental waste cannot be regarded as manufactured excisable goods, and central excise duty is not chargeable on it.

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Issues: Whether sawn paratty and saw dust, arising during the sawing of timber logs, were excisable products liable to central excise duty.

Analysis: The products arose incidentally in the course of sawing timber logs and were in the nature of scrap. The decision followed the view that a product is not excisable merely because it may fetch a price if it is not intentionally manufactured and emerges only as an inevitable by-product or waste in the manufacturing process. On that basis, the Tribunal held that the sawn paratty and saw dust could not be treated as manufactured excisable goods.

Conclusion: The issue was decided in favour of the assessee; sawn paratty and saw dust were held not to be excisable products and no duty could be demanded on them.

Ratio Decidendi: Scrap or waste arising incidentally and inevitably in the course of a process, without being intentionally manufactured, is not excisable merely because it may have market value.

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