Clarification - non-excisable scrap

[Ramaiah Swamy]

After amendment to section 2(d) of central Excise Act,1944. effective May 2008 what is the position about non-excisable scrap ? Is it that duty should be paid forr whatever scrap sold be it arising during manufacguring actitiviies or dismantling etc., ? Even unserviceable scrap should also be removed only on excise duty ?

[Surender Gupta]

Duty of excise on wastage / scrap is to be decided with reference to duty on finished goods. If finished goods are exempt, there is no duty on wastage or scrap. Otherwise, you have to pay duty on sale value of such wastage or scrap if otherwise not exempted.

AI Summary

Excise duty on scrap depends on the duty status of finished goods; exempt finished goods render scrap non-dutiable. Excise duty on wastage/scrap is determined by reference to the excise status of the finished goods: if finished goods are exempt, scrap is not dutiable; if finished goods are dutiable, scrap is taxable and duty is payable on the sale value of such wastage or scrap unless a specific exemption applies.