2004 (2) TMI 645

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....manufacture of rejected batteries. 2. Shri Ashutosh Upadhyay, learned Advocate, submitted that the Appellants manufacture Primary Cells and Primary Batteries Dry Battery cells and intermediate products of Dry Battery cells; that the components manufactured by them are captively used in the manufacture of dutiable final product Dry Battery cells and they claim exemption under Notification No. 67/95-C.E., dated 16-3-1995; that during the course of manufacture of Dry Battery Cells, a very small percentage of rejected/damaged Dry Battery cells is weeded out as waste and scrap; that the Asst. Commissioner, Central Excise under 4 Orders-in-Original confirmed the demand of duty and imposed penalty on the ground that the benefit of Notifica....

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....e to the Central Excise Tariff Act other than some specified goods; that the rejected Dry Battery cells are not falling under the first Schedule to the Central Excise Tariff Act and as such the components which have been used in or in relation to the manufacture of such rejected Dry Battery cells, the benefit of Notification No. 67/95 cannot be extended; that the Tribunal held in the case of Union Carbide (I) Ltd. (supra) that the waste of Dry Battery cells cannot be classified under Heading 79.02/79.03 of the Tariff and the Revenue has not pointed out any Tariff Heading under which the waste and scrap is covered in the Tariff; that the Tribunal has further held that as per Section 2(d) of the Central Excise Act excisable goods means goods ....

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....n 3 of the Table below Notification No. 67/95-C.E. The benefit of notification is available to the goods manufactured in a factory and used within the factory of production in or in relation to the manufacture of final product specified in column 3 of the table. The components, after being manufactured by the Appellants, are used by them within the factory of production in or in relation to the manufacture of Dry battery cells which is specified in column 3 of the table. Thus the benefit of exemption notification is available to the Appellants. The mere fact that during the process of manufacture of Dry Battery Cells which is specified in column 3 of the table, certain Dry Battery Cells are being rejected on account of numerous reasons will....