Copper scrap from Modvat inputs was not eligible for duty-free removal absent specific governmental specification under Rule 57F.

Copper scrap generated during manufacture from Modvat-credit inputs was not treated as inputs sent out for testing, repairs, refining, reconditioning or similar purposes under Rule 57F(2). Waste arising from processed inputs fell instead within Rule 57F(4), which allowed duty-free removal only where the Central Government had specified the relevant class of waste by order. Because no such specification covered copper scrap, the scrap could not be removed without duty, and the duty demand stood.

---

---

Issues: Whether copper scrap arising during manufacture from inputs on which Modvat credit had been taken could be removed without payment of duty under Rule 57F of the Central Excise Rules.

Analysis: Rule 57F(2) permits removal of inputs as such or after partial processing for specified purposes, subject to return of the inputs and any waste arising from such operations. Copper scrap generated in the course of manufacture was treated as a finished by-product and not as an input sent out for test, repairs, refining, reconditioning, or similar operations. The only provision governing waste generated from processed inputs was Rule 57F(4), under which duty-free removal was available only if the Central Government had specified the relevant class or category of waste by order. No such specification existed for copper scrap. The clarification relied upon for aluminium scrap could not be extended to copper scrap in the absence of an applicable governmental instruction.

Conclusion: Copper scrap was not eligible for duty-free removal under Rule 57F, and the duty demand was upheld in favour of the Revenue.

---