Rule 57F(4) duty relief for aluminium scrap denied where no Government order existed and later trade notice was not retrospective

Aluminium scrap arising from inputs on which Modvat credit had been taken could not be cleared without duty under Rule 57F(4) unless the Central Government had specifically authorised such removal or the waste was destroyed in the prescribed manner. No such Government order existed for the relevant period, and a later trade notice could not be applied retrospectively to past clearances. Even on a liberal reading, the trade notice did not extend exemption to the disputed period. Duty was therefore payable on the scrap, and the Revenue's appeal succeeded.

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Issues: Whether aluminium scrap generated from inputs on which Modvat credit had been taken could be cleared without payment of duty under Rule 57F(4) on the basis of a trade notice, and whether such trade notice could support relief for a period prior to its issuance.

Analysis: Rule 57F(4) governing waste arising from processing of inputs permits removal of such waste on payment of duty, removal without duty only where the Central Government has specified the class or category of waste by order, or destruction in the prescribed manner. No such Central Government order existed during the relevant period. The trade notice relied upon was issued later and could not operate retrospectively for clearances made before its issuance. Even on a liberal construction, the trade notice did not justify exemption for the period in dispute.

Conclusion: The scrap was not entitled to clearance without duty for the relevant period, and the demand of duty was correctly raised. The Revenue's appeal was therefore allowed.

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