should duty paid on scrap material cleared (waste corrugated or pvc drum)

[Guest]

res. sir,

we are manufacturer of dutiable goods and we are cleared waste and scrap material without paying any duty ...material like (pvc drum, waste corrugated box , waste paper tube) which we are commercial product or duty free product so when we sell this item without paid any duty so in actual scenario should we pay any duty on this material?

regards,

manan pandya

[PAWAN KUMAR]

Dear Sir,

As per my view, no need to pay any duty on such waste and scrap packing material being cleared because it is not the production/manufacturing scrap.

[YAGAY andSUN]

Dear Manan,

Please refer West Coast Industrial Gases 2003 (155) ELT 11 (S.C). = 2003 (4) TMI 110 - SUPREME COURT OF INDIA It is a settled legal position that duty is not leviable on drums/barrels/containers cleared form the factory as decided by the Supreme Court. There are a plethora of decisions in this support before the said judgment of Supreme Court also. Hence, in our opinion, no reason to demand any excise duty on drums/barrels/containers cleared from the factory by the assessee.

Further, in 2008, there was change in the definition of goods that even goods (waste) etc. fetch some money they will deemed as marketable.

For determining the liability of C.E., two components are required:-

1. Goods should be manufactured
2. Goods should be marketable

In this matter goods are not manufactured by the assesse, therefore, no C.E. duty would be payable even after the change in the definition of goods.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Excise liability on cleared scrap and containers not attracted where items are not manufactured goods and not produced. Excise duty is not leviable on waste or scrap packing materials cleared from the factory where such items (drums, boxes, tubes) are not manufactured by the assessee; despite amendments treating some waste as marketable, central excise liability requires goods to be both manufactured and marketable, and absent manufacture by the assessee no duty arises.