Excisable scrap and disputed manufacturing use require factual verification before duty liability can be finally determined.

Scrap generated during manufacture, or in incidental and ancillary processes connected with manufacture, may constitute excisable waste where it arises from a process within section 2(f). However, where the actual use of dies, jigs, fixtures and tooling is disputed, specifically whether they were used in manufacture or only in repair and maintenance, the factual foundation for duty liability must be verified before final determination. The matter was therefore remanded for fresh adjudication, leaving the duty issue open for reconsideration.

---

---

Issues: Whether the scrap generated during manufacture, repair or maintenance of dies, jigs, fixtures and tooling was liable to duty and whether the matter required fresh factual verification.

Analysis: Scrap arising in the course of making spare or replaceable parts, or during incidental or ancillary processes connected with manufacture, can amount to excisable waste where it emerges from a manufacturing process within the meaning of section 2(f). The precedent relied upon by the Revenue was treated as applicable in principle, while the contrary decision was held inapplicable on the facts. At the same time, the record showed a dispute on the actual use of the items, namely whether they were used in manufacture or in repair and maintenance, and that factual question needed verification before final determination of duty liability.

Conclusion: The dispute was not finally decided on merits and was sent back for fresh adjudication after verification of the use of the items.

Final Conclusion: The Revenue succeeded in obtaining a remand, and the duty issue was left open for reconsideration by the adjudicating authority.

Ratio Decidendi: Scrap generated from incidental or ancillary manufacturing activity may be excisable, but where the factual basis for liability is disputed, the matter must be verified before duty can be finally determined.

---