Scrap and waste dutiability hinges on manufacture, tariff listing and marketability; Cenvat credit may be used for duty.

Scrap and waste are dutiable only if generated in manufacture, specified in the tariff and marketable; Cenvat credit may be used to pay duty on such items. When listed in the tariff, manufacturers must record scrap in registration, annual classification declarations and daily stock accounts, and obtain permission for alternate storage. Non-manufacturing or non-marketable waste is not dutiable and may be destroyed with permission. Empties used for inputs are not dutiable. Damaged finished goods and inputs that become waste before use involve specific permission and duty/Cenvat adjustments.

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