Waste-and-scrap classification barred exemption and deemed Modvat credit for remelted iron and steel inputs.

Purchased iron and steel waste and scrap used only after remelting for manufacture of stainless steel ingots was treated as "waste and scrap" under Note 6(a) to Section XV of the Central Excise Tariff Act. On that basis, the article states that benefit of Notification No. 202/88-C.E. was not available and deemed Modvat credit could also be denied, because the inputs fell within the relevant waste-and-scrap definition. The absence of evidence to displace the lower authorities' finding was material, and the alleged denial of hearing caused no prejudice since the matter had already been heard in appeal. The exemption claim and credit claim were therefore rejected.

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Issues: Whether the benefit of Notification No. 202/88-C.E. was available on final products manufactured from purchased iron and steel waste and scrap, and whether deemed Modvat credit could be denied on the ground that the inputs were waste and scrap.

Analysis: The inputs purchased from the market were admittedly melted for manufacture of S.S. ingots. The definition of waste and scrap in Note 6(a) to Section XV of the Central Excise Tariff Act covers metal waste and scrap from manufacture or mechanical working of metals and metal goods not usable as such because of breakage, cutting up, wear or other reasons. On the facts, the purchased material, having been used only after remelting, was correctly treated by the lower authorities as waste and scrap. The appellant did not produce evidence to dislodge that finding. The plea of denial of hearing before the Assistant Collector also did not cause prejudice, as the matter had already been heard by the Collector (Appeals).

Conclusion: The denial of exemption under Notification No. 202/88-C.E. and deemed Modvat credit was upheld, and the appeal failed.

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