Page 53 - ELT_15th June 2020_VOL 372_Part 6th

2020 ] COURT-ROOM HIGHLIGHTS A207

(1) Manufacture — Segregation of imported brass scrap
into foundry and non-foundry scrap, whether consti-
tute manufacturing activity?

(2) Scrap — Clearance of segregated non-foundry scrap,
whether can be said to be clearance “as such”?
(3) Demand — Clearance of segregated non-foundry scrap
in DTA considering the same as clearance “as such”,
whether demand sustainable?
The Supreme Court Bench comprising Hon’ble Mr. Justice A.M.
Khanwilkar and Hon’ble Mr. Justice Dinesh Maheshwari on 25-11-2019 after
condoning the delay granted leave in Special Leave Petition (Civil) Diary No.
38389 of 2019 filed by Commissioner of Customs (Preventive) (Respondent being
Suraj Recycling Pvt. Ltd.) against the Judgment and Order dated 14-12-2018 of
Gujarat High Court in Tax Appeal No. 1353 of 2018 (Commissioner v. Pooja Metal
Industries).
The Gujarat High Court in its impugned order had held that the segrega-
tion of imported scrap into foundry and non-foundry scrap is the very first step
of the manufacturing process. As it would not be possible to manufacture brass
articles, unless the plastic and other scrap or waste is removed.
The High Court further held that the clearance of segregated non-
foundry scrap in DTA cannot be construed as clearance “as such” because the
segregated material has an altogether different character, use, value per unit and
classification from that of the imported brass scrap. Also, non-foundry waste
cannot be used for manufacturing of brass articles as it was brass scrap which
was imported for the purpose of manufacture of brass articles.
The High Court had relied upon clause (3) of Notification No. 52/2003-
Cus., dated 31-3-2003, held that the demand raised upon clearance of segregated
non-foundry scrap in DTA considering it as clearance “as such” is not sustaina-
ble as the scrap and waste arising in the course of manufacture of finished goods
are exempted from the Customs duty.
REPRESENTED BY : Mr. A.N.S. Nadkarni, ASG, Mr. B. Krishna Prasad,
AOR, Ms. Vishakha and Ms. Nisha Bagchi, Advocates,
for the Petitioner.

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EXCISE LAW TIMES  15th June 2020  53