S.L. Peeran, Member (J)
1. Both these appeals arise from Order-in-Appeal No. 25/98, dated 28-7-1998 passed by the Commissioner (Appeals). The impugned order disposes of two Orders-in-Original and hence the appellants have filed these two appeals. The facts of the case are that the appellants cleared rejected silver steel vacuum flask under Rule 57F(3) to job workers for the purpose of cutting, powder removing and conversion into sheets. The department initiated adjudication proceedings treating the same as scrap for demand of duty. The Original Authority observed that the rejected stainless steel flask is not the final product; that Rule 57F(3) enables the inputs that have been partially processed during the course of manufacture to be sent to a place outside the factory for the purpose of test, repairs, refining and reconditioning or any other process necessary for the manufacture of the final products; that the expression used in Rule 57F(3)(a) is “carrying out any other operation necessary” is very wide, vast in amplitude and meaning; and that such expression naturally does accommodate conversion of partially processed sheets into stainless steel sheets for further manufacture of stainless steel flask. The department was aggrieved with the said findings of the original authority and hence filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) disagreed with the original authority’s findings and reversed the same by holding that “I have carefully considered the arguments of both sides. The processing done by the job worker should be for the manufacture of final product. It is not for retrieving the stainless steel and recycling. In the circumstances the rejected stainless steel vacuum flask can be considered only as a scrap. In the light of the above, the impugned order is not correct and the same is set aside. The departmental appeal is allowed”.
2. Learned Counsel submits that the view expressed by the Commissioner (Appeals) has been disagreed by the Larger Bench of the Tribunal in the case of Wyeth Laboratories Ltd. as reported in 2000 (120) E.L.T. 218, wherein it has been clearly held that removal of waste for remelting which is generated in the process of working on ingots is required to be granted Modvat credit in terms of Rule 57F(2) and 57F(4). He submits that the said judgment is clearly applicable to the facts of the present case and hence the Order-in-Original granting them Modvat credit is required to be confirmed by setting aside the order impugned.
3. Learned D.R. reiterates the departmental view.
4. On a careful consideration of these submissions and on a perusal of both these orders, I am of the considered opinion that the view expressed by the Assistant Commissioner in the impugned order has since been confirmed by the Larger Bench in the case of Wyeth Laboratories Ltd. v. CCE as reported in 2000 (120) E.L.T. 218, wherein it has been clearly held that the item impugned cannot be held as scrap and Modvat credit is required to be extended in the matter. Following the ratio of the said judgment, the appeals are allowed by way of setting aside the order impugned.