2001 (12) TMI 249

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....chedule to the Central Excise Tariff Act as Zinc Waste and Scrap/Zinc dust. 2. Shri G. Shiv Das, learned Advocate, submitted that the Appellants manufacture dry cell batteries falling under Chapter 85 of the Tariff; that they avail of Modvat credit of the duty paid on the inputs under Rule 57A of the Central Excise Rules; that in the course of manufacture of the final product, certain defective cell batteries get generated which are physically hammered by them and resultant scrap is sold in the market; that show cause notice was issued for demanding duty on such scrap by classifying the same under Heading 7902.00/7903.10; that the Assistant Commissioner, relying on the decision in Khandelwal Metal & Engineering Works v. U.O.I. [1985....

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.... applied to Heading 7902 would cover a situation where the input is zinc and the waste and scrap arises as a result of mechanical working of zinc or the said zinc becomes unusable because of breakage; cutting up, etc.; that the goods in question is the hammered dry cell battery which, as accepted by the Commissioner himself, contains around 16 inputs and the content of zinc is only 16% to 20%; that consequently, the hammered dry cell battery cannot be considered as a waste and scrap of zinc. He finally submitted that the action of the Commissioner (Appeals) in directing them to pay duty on the portion of the zinc content is invalid as duty can be demanded on the goods in the condition in which they are cleared; that it cannot be that one pa....

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....ndicated as under :- (i)   Hammered Cells 'D' size battery zinc/scrap/ waste, (ii)   Hammered Cells AA size battery zinc/scrap/waste, (iii)   Zinc cans contaminated with asphalt/zinc/off cut scrap zinc scrap/waste. The learned D.R., therefore, contended that if what had been cleared by the Appellants was actually hammered cells, there was no need for them to have filed classification list with the above mentioned description. Finally he relied upon the decision of the Larger Bench in the case of Khanbhai Essofbhai & Ors. v. CCE, Calcutta & Ors. [1999 (107) E.L.T. 557 (Tribunal) = 1999 (30) RLT 519]. 4. We have considered the submissions of both the sides. The waste and scrap in question has ....

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....atteries. It is thus clear that the waste is of dry cell batteries and not of zinc and as such it cannot be classified under Heading 79.02/79.03 of the Tariff. The Revenue has not pointed out any Tariff heading under which the waste and scrap of dry cell batteries is covered in the Tariff. As per Section 2(d) of the Central Excise Act, "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act as being subject to a duty of excise. In absence of any heading covering waste and scrap of dry cell batteries, the impugned product is not excisable. This was the view expressed by the Appellate Tribunal in the case of Finolex Cables Ltd. v. CCE, Pune [1998 (100) E.L.T. 517] in which the Rev....