TaxTMI 
TaxTMI 
1986 (9) TMI 86
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.... Salem I.D.O. Salem 636 007 Dear Sir, Re: Sale of waste In the course of manufacture of paper, the following items are received as waste: 1. Causticizing lime sludge (50% dry) 2. Effluent sludge (40% dry) 3. Causticiaing hypo grits 4. Clinker ash 5. Fine ash 6. Chipper House dust. All these years we have been throwing away the above products as waste except in the case of causticizing lime sludge in which a small quantity was sold to Messrs. India Cements and on which duty was demanded. An appeal was also filed with Appellate Collector of Central Excise, who has since passed orders in this regard. It is, of course, our contention that we are not liable to pay duty on lime sludge in view of the fact that it is ....
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....em 68 and get it approved by the Assistant Collector of Central Excise, Erode and you have to observe all the Central Excise formalities enshrined in the Central Excise rules and clear the goods only under gate pass 1. You have also furnished in your letter, dated 3.7.1980 that you have cleared 5519 314 MT of lime slug from 19.5.1980 to 30.6.1980 at Rs.2.50 per MT valued at Rs.13,798.29. Since you have cleared the goods without central excise formalities, you may please show cause why action under Rule 173 Central Excise Rules may not be taken against you and also with the duty due i.e., s.1,103.85 may not be collected from you. The reply may be sent to the Assistant Collector of Central Excise, Erode, within one week from the date of....
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....e on the pronouncement of a single Judge of the High Court of Bombay in Indian Aluminum Co. Ltd. and another v. A..K. Bandhyopadhyaya and others - 1980 (6) E.L.T. 146. The learned single Judge dealt with a case of a company manufacturing aluminum sheets and the question that arose for consideration before him was as to whether dress and skimmings could be considered as a byproduct so as to come within the purview of excisable goods. The learned Judge expressed the view that refuse or cum thrown off during the process of manufacture cannot, by any stretch of imagination, be considered as a by-product and merely because such refuse or scum may fetch some price in the market does not justify it being clothed with the dignity of being called a ....
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.... to whether 'waste and scrap' can be regarded as capable of being produced or manufactured, the appellant's argument being that it cannot be so regarded, has already been answered by us in the affirmative. The production of waste and scrap is a necessary incident of the manufacturing process. It may be true to say that no prudent businessman will intentionally manufacture waste and scrap. But it is equally true to say that waste and scrap are the by-products of the manufacturing process. Sub-standard goods which are produced during the process of manufacture may have to be disposed of as 'rejects' or as scrap. But they are still the products of the manufacturing process. 'Intention' is not the gist of the manufacturing process. We have alre....