Scrap classification under Item No. 25 defeats exemption where waste arises before processed goods cease to fall under that entry.

Waste and scrap generated during blanking of duty-paid stainless steel sheets remained attributable to goods still falling under Item No. 25 because the processing had not yet resulted in finished stampings or goods classifiable under Item No. 28A. Since Notification No. 204/83-C.E. applied only where such scrap arose from goods falling under an item other than Item No. 25, the exemption was unavailable on the facts. The scrap was therefore correctly classified under Item No. 25, and the denial of exemption was upheld.

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Issues: Whether waste and scrap generated at the stage of blanking from duty-paid stainless steel sheets remained attributable to goods falling under Item No. 25 of the Central Excise Tariff, so as to deny exemption under Notification No. 204/83-C.E.

Analysis: The waste arose while the sheets were being processed into strips and blanks, before the manufacture of stampings was complete. At that stage, the goods continued to fall under Item No. 25 and had not become goods classifiable under Item No. 28A. The exemption under Notification No. 204/83-C.E. was available only where the waste and scrap arose from goods falling under any item other than Item No. 25, and that condition was not satisfied on the facts.

Conclusion: The waste and scrap were correctly classified under Item No. 25, and exemption under Notification No. 204/83-C.E. was not available; the finding was against the assessee.

Final Conclusion: The appeal failed because the scrap was held to arise from goods continuing to fall under Item No. 25 at the relevant stage, leaving the denial of exemption undisturbed.

Ratio Decidendi: Where scrap arises before the processed goods cease to fall under Item No. 25, the scrap does not qualify as having arisen from goods falling under any item other than Item No. 25 for the purpose of the exemption notification.

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