SHREE MAHAVIR INDUSTRIES Vs. C.C.E.

JUDGEMENT

(1.) THE appellant, as a small scale unit, engaged in the manufacture of brass parts which are liable to central excise duty under Chapters 74, 83, 84, 87 etc. As a small scale unit, they are eligible for exemption under Notification No. 1/93 dated 28.2.93.

(2.) DURING the manufacture of parts, certain amount of metal becomes waste and scrap. Appellants cleared such waste and scrap to another manufacturer for recycling into original metal rods. Metal so retrieved, is brought back and used by the appellant in the manufacture of parts. Exemption under Notification No. 1/93 is with regard to the aggregate value of specified (in the annexure to the Notification) goods cleared by a manufacturer. However, the value of captively consumed goods is to be excluded while computing the aggregate value. The impugned orders have held that the aggregate value of goods cleared by the appellants should be worked out by including the value of waste and scrap arising during the manufacture of parts and sent for re -melting. On account of that, a duty demand of Rs. 41,069/ - has been raised in the impugned orders.

(3.) AS against this, the Revenue has contended that the Explanation 6 covers only specified goods which are used for further manufacture of specified goods "within factory of production of inputs" and not goods which are taken out of the factory of production for manufacture in other premises.