1997 (7) TMI 249

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....nents like switches, relays and potentiometers. The appellants purchase silver strips/coils containing 90% silver for purposes of fabricating precious metal contacts like the rotor blades, clips etc. The process involve punching out the components from silver strips using presses and progressive tools. The portion of the strips remaining with holes corresponding to the outside shape of the component punched out is returned by the appellants to the supplier of silver strips for reprocessing them into strip form again. The appellants had been returning the remnant portion of silver strips till 1-3-1986 to the suppliers and were receiving them back after reprocessing under Rule 56C. At that time silver strips were dutiable at 12%. Rule 56C pro....

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....ditioning was classifiable as 'scrap' was erroneous. Advocate submitted that the term 'scrap' normally meant something which was contaminated and was of lesser value than the original material. Scrap of metal can be made use of only to a much lesser extent and that too after refining. As per the definition of waste and scrap given under Section XV and Chapters 72, 74, etc. of the Central Excise Tariff Act scrap is an item fit only for recovery of metal by remelting the same. In the case of the appellants the remnants were uncontaminated silver material. The remnants remelted for conversion into strip for purposes of punching them again. There was no loss of purity of the metal in the process of remelting and rerolling. Therefore, the remnan....