Exemption for waste and scrap remained valid where nil duty applied, and later withdrawal could not operate retrospectively.

Waste and scrap cleared during the relevant period remained covered by Notification No. 172/84-C.E. because the exemption was in force and its conditions were satisfied. Rule 57F(4) was read as requiring removal on payment of the appropriate duty, and where the applicable duty under the notification was nil, clearance complied with the rule. The later notification withdrawing the exemption for cases where credit had been taken operated only prospectively and could not be applied retrospectively. The duty demand on the scrap was therefore not sustainable.

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Issues: Whether waste and scrap cleared during the material period were liable to duty under Rule 57F(4) notwithstanding Notification No. 172/84-C.E., and whether the later notification withdrawing the exemption could operate retrospectively.

Analysis: Rule 57F(4) required waste arising from processing of inputs on which credit had been taken to be removed on payment of duty, or without duty only in specified cases. The notification exempting copper scrap was in force during the relevant period and there was no dispute as to the satisfaction of its conditions. The phrase requiring removal on payment of duty was read as payment of the appropriate duty, and where the applicable duty under the notification was nil, the clearance satisfied Rule 57F(4). The later notification introducing a clause denying the exemption where credit had been taken was issued only subsequently and could not be given retrospective effect.

Conclusion: The exemption remained available to the scrap cleared during the relevant period, and the demand of duty was not sustainable.

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