Manufacturing scrap and waste were held outside central excise duty under earlier precedent on non-manufacture.

Scrap and waste arising during manufacture, including mutilated tyres, tubes and flaps, rubberised fabric cut pieces, scrap rubber compound, floor sweeping, bead cuts and rubberised bead wires, were treated as not liable to central excise duty. The material point was that earlier decisions had already held that scrap generated in the course of manufacture does not amount to manufacture for excise purposes, and the Revenue accepted that the issue was covered by those rulings. The operative effect is that such incidental manufacturing scrap remained outside the excise levy.

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Issues: Whether the items arising during the course of manufacture, namely mutilated tyres, tubes and flaps, rubberised fabric cut pieces, scrap rubber compound, floor sweeping, bead cuts from tyre and rubberised bead wires, were liable to central excise duty.

Analysis: The dispute concerned products generated in the course of manufacture and their excisability. Earlier decisions had taken the view that scrap arising during manufacture does not amount to manufacture and is not liable to central excise duty. The same position had already been applied in the parties' earlier proceedings, and the Revenue also did not dispute that the matter stood covered by those decisions.

Conclusion: The impugned goods are not liable to excise duty.

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