2017 (9) TMI 1250

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....h raw material / packing material. These packing materials / plastic containers are used during the course of manufacture and these are cleared as usable and returnable in nature. During the course of usage of such plastic containers, some of these items were found to have defects, breakage, leakage etc. As such plastic containers can no longer be used for the intended purpose, the appellant cleared them as waste. The department was of the view that appellant is liable to pay duty on such waste / scrap cleared and issued show cause notice proposing demand of duty, interest and also proposing imposition of penalty. After due process of law, original authority confirmed the demand of Rs. 10,87,956/- along with interest and also imposed equal ....

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....alleging that the process of cutting of waste plastic container carried out by the appellant amounts to "manufacture". The appellant has cut the broken / defective containers because these bore the brand name. By such cutting of waste plastic containers no new product with a new name emerges. Such plastic containers before and after cutting are nothing but waste / scrap. It is correct that appellant has no intention to manufacture waste and is registered for manufacture of packaged drinking water. The issue is similar to the issues decided in the case of Pepsico India Holdings as well as Dhillon Kool Drinks & Beverages Ltd. (supra) 5. The relevant paragraph in the decision of Pepsico India Holdings is reproduced for ready reference : "6. ....