2016 (11) TMI 271

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.... pay Central Excise duty on the waste of band aid generated in the hands of the job worker. The relevant facts after filtering out unnecessary details are, appellant is a manufacturer of  Band-Aid product chargeable to Excise duty under chapter heading number 30.04 of the Central Excise Tariff Act, 1985. During the phase of quality inspection and before clearance of the same as finished products, certain manufacturing defect is noticed which renders the goods unmarketable, such defective Band-Aid are shredded and sent for incineration.  Appellant outsourced the activity of the quality inspection by sending Band-Aid under job work challan to the job worker.  Job worker after completion of the inspection of the quality of the g....

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....the shredded Band-Aid is not a manufactured product and hence not leviable to Central Excise duty.  It is his submission that the law is fairly settled on this point.   He cites the following decisions:- a)  Union of India v. DSCL Sugar Ltd. - 2015 (322) ELT 769 (SC) b)  Union of India v. Indian Aluminum Co. Ltd. - 1995 (77) ELT 268 (SC) c)  Modi Rubber Ltd. - 1987 (29) ELT 502 (Del.) 6.  Learned departmental representative would reiterate the findings of the lower authorities. He would submit that the shredded waste of Band Aid are excisable product inasmuch appellant has dispatched the finished goods to the job worker which is not permitted as per the provisions of the Central Excise Act.  ....

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....not in agreement with the submissions of the learned departmental representative and the findings recorded by both the lower authorities that these clearances needs to be taxed as final products "Band Aid" for more than one reason. 8.1  Firstly, in our view, the finished products Band-Aid can be considered finished product only when they packed and certified as fit for dispatch to the market, on approval of the quality control section of the appellant.  In the case in hand the quality control has given approval only to the packed quantity received from the job worker. It is in the fitness of the things that the appellant had shredded the unmarketable Band Aid in order to avoid the misuse of the same and cleared the same for incin....