M/S. GRASIM INDUSTRIES LTD. versus UNION OF INDIA

M/S. GRASIM INDUSTRIES LTD. versus UNION OF INDIA

Metal scrap and waste generated in the course of repair and maintenance of machinery, using materials not utilized as raw material for the end excisable product (cement), do not result from a manufacturing activity in relation to production of the end product; such scrap does not constitute a by-product of the end product and is not excisable to duty under s.3 of the Central Excise Act, 1944.

Parties
Appellant: Grasim Industries Ltd.; Respondent: Union of India
Jurisdiction
India
Judgment Date
13 October 2011
Procedural Posture
Civil Appeal / Final Decision on Appeal From High Court
Outcome
Appeal allowed
Legal Topics
Central Excise, Excisability of Metal Scrap, Definition of Manufacture
Taxation Law Central Excise Excisability of Metal Scrap Definition of Manufacture

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Parties

Grasim Industries Ltd.

Appellant

Union of India

Respondent

Procedural Posture

Civil Appeal / Final Decision on Appeal From High Court

Legal Issues

  1. 1 Whether metal scrap or waste generated during repair and maintenance of worn out machinery or parts of a cement manufacturing plant amounts to 'manufacture' under s.2(f) of the Central Excise Act, 1944, and is therefore excisable to duty

Ratio Decidendi

Metal scrap and waste generated in the course of repair and maintenance of machinery, using materials not utilized as raw material for the end excisable product (cement), do not result from a manufacturing activity in relation to production of the end product; such scrap does not constitute a by-product of the end product and is not excisable to duty under s.3 of the Central Excise Act, 1944.

Court Disposition

Appeal allowed

Orders

  • Judgment and Order of the High Court dated 31.07.2008 set aside
  • Order dated 09.08.2005 of the Tribunal restored