COMMISSIONER OF CENTRAL EXCISE Vs. AMADALAVALASA CO-OPERATIVE

JUDGEMENT

(1.) This Revenue appeal arises from Order -in -Appeal No.63/2002 Dated : 30.09.02. The Ld. Commissioner after due consideration of the matter has come to conclusion that waste and scrap generated by dismantling of worn out machinery previously installed in the appellants' factory does not come within the definition of the term "manufacture" appearing under Sec. 2(f) of the Act as well as the provisions of the Sec. Note 8(a) of Section XV of the Schedule of the CETA. The finding relied by the Commissioner from Para 6 to 10 is reproduced herein below: - "6. The basic issue involved in the instant appeal, is the duty liability on waste and scrap generated by dismantling of worn out machinery previously installed in the appellant's factory. The adjudicating authority, after examining the issue, has taken a view that dismantling of worn out machinery amounts to manufacture and the resultant scrap is accordingly liable to duty under the provisions of Central Excise Act, 1944. The adjudicating authority, while deciding matter, has relied upon the definition of "manufacture" appearing under Sec.2(f) of the Central Excise Act, 1944, as well as the provisions of Section Note 8(a) of Sec. XV of the Schedule to the Central Excise Tariff Act, 1985. In the light of these provisions, he has held that the waste and scrap generated by the appellants fall in the category of metal goods definitely not usable as such because of breakage, cutting up, wear or other reasons and has accordingly concluded that the impugned goods come under the purview of Note 8(a) of Section XV of the Central Excise Tariff Act, 1985 read with the definition of "manufacture" appearing under Section 2(f) of the Central Excise Act, 1944 and are liable to duty as scrap. The adjudicating authority has made the following further observations in support of his stand:

(2.) We have heard both sides in the matter.

(3.) Ld. DR re -iterated the grounds of appeal and submitted that the waste and scrap in the form of old scrap machinery fall under Chapter Sub -heading No. 7204.90 of the CETA.