Waste treatment of broken glass bottles in manufacture sustains Rule 57D credit where breakage is normal and uncontroverted.

Broken glass bottles arising as a normal incident of manufacturing P & P medicines can be treated as waste under Rule 57D of the Central Excise Rules, 1944, so the assessee's credit cannot be denied on that basis alone. The Tribunal followed the earlier precedent covering both the characterisation of broken bottles as waste and the absence of separate proof of breakage during manufacture, and held that the Revenue had not shown any reason to displace that ratio. The assessee was therefore entitled to the Rule 57D benefit and the Revenue's challenge failed.

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Issues: Whether broken glass bottles used in the manufacture of P & P medicines could be treated as waste under Rule 57D of the Central Excise Rules, 1944 so as to sustain the credit claimed by the assessee.

Analysis: The Tribunal noted that the cited precedent had already covered both the objection that broken bottles are not waste and the contention that there was no proof of breakage during manufacture. It accepted that breakage of glass bottles is a normal feature in the manufacturing process and that the Revenue had not shown any basis to displace the application of the earlier ratio to the facts of the case.

Conclusion: The assessee was entitled to the benefit of Rule 57D and the Revenue's appeal failed.

Final Conclusion: The order allowing the assessee's claim was upheld and the Revenue's challenge was rejected.

Ratio Decidendi: Where breakage of glass bottles occurs as a normal incident of manufacture, the resultant breakage can be treated as waste for the purpose of Rule 57D of the Central Excise Rules, 1944 and the credit cannot be denied on that basis alone.

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