Manufacturing wastage not classifiable as metal waste and scrap unless it fits the tariff description and mechanical-working test.

Nickel off-cuts and wastage generated during manufacture of finished goods were not treated as metal waste and scrap under Note 6(a) of Section XV of the Central Excise Tariff Act, 1985, because the material arose in the course of manufacture, was reused in the process, and was not shown to be waste and scrap from mechanical working of metals. As the goods were not nickel itself and the record did not show removal for sale as scrap, the lower authority's classification was unsustainable and the demand could not stand.

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Issues: Whether the nickel off-cuts and wastage arising during manufacture of the final products were liable to be treated as metal waste and scrap under Note 6(a) of Section XV of the Central Excise Tariff Act, 1985.

Analysis: The goods manufactured by the appellants were not nickel itself but finished articles falling under various tariff headings. The wastage arose in the course of manufacture and was reused in the process, and the record did not show that it was waste and scrap from mechanical working of metals as contemplated by Note 6(a). The material was also not removed outside for sale.

Conclusion: The disputed wastage did not answer the description of metal waste and scrap under Note 6(a) of Section XV, and the classification adopted by the lower authority was unsustainable.

Final Conclusion: The appeal was allowed and the demand or classification against the assessee did not survive.

Ratio Decidendi: Waste arising in the manufacture of finished goods is not liable to be treated as metal waste and scrap unless it results from mechanical working and satisfies the statutory description of the tariff entry.

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