ORDER
V.P. Gulati, Member (T)
1. This Reference arises out of the order of the Tribunal bearing No. 630/91, dated 11-11-1991. The issue decided by the Tribunal was relating to the dutiability of the scrap in terms of Rule 57F(4) of the Central Excise Rules. The Tribunal, following the earlier decision reported in 1992 (59) E.L.T. 122 (Tri.), has held that the scrap generated in the appellant’s factory was required to pay duty under Rule 57F(4). The applicants have urged the following questions of law for reference;
(i) Whether the Aluminium Scrap arising in the process of manufacture which is recycled is an input or not, eligible for the benefit of removal under Rule 57F(2) without payment of duty.
(ii) Whether any waste referred to under Rule 57F(4) would also cover scrap arising in the process of manufacture which is recycled.
(iii) Whether the Trade Notice No. 94/89, dated 18-05-1989 is not a supplementary instruction under Rule 233 indicating that Aluminium scrap is an input which can be removed under Rule 57F(2) without payment of duty.
(iv) Whether retrospective effect should be given to the Trade Notice No. 94/89, dated 18-05-1989 as it is only a clarification of the legal position that Aluminium Scrap arising in the process of manufacture is an input permissible to be removed under Rule 57F(2) without payment of duty.
(v) Whether a pleading made at the time of personal hearing consequent on change in the legal position, asking for more relief than originally prayed for, can be allowed by the Appellate Authority.
The applicants have urged that the scrap generated in the course of the manufacture of the finished product in the appellant’s factory could be removed without payment of duty in terms of Rule 57F(2) and in this connection referred to the explanation of Rule 57A under which the inputs have been defined, which explanation for convenience of reference is reproduced below :
“Explanation – For the purpose of this rule, “inputs” includes –
(a) inputs which are manufactured and used within the factory of production, in or in relation to, the manufacture of final products.”
The plea is that the scrap is one of the notified items as input under Rule 57A and, therefore, would be covered by the term “input” and all the benefits which are available in respect of the inputs would automatically be available in respect of the scrap also. It has therefore been pleaded that since in terms of Rule 57F(2) the inputs received in the factory and in respect of which Modvat credit has been taken, would be eligible for removal without payment of duty, the appellants could take out the scrap in terms of this Rule without payment of duty for processing outside.
2. The learned Departmental Representative adopted the reasoning of the order of the Tribunal to say that there is a separate provision for dealing with the scrap generated in the course of manufacture under the Modvat Scheme and in this case the scrap had been cleared outside the factory and in terms of Rule 57F(4), the same has to suffer duty.
3. We have given a careful thought to the plea urged by the applicants. The plea of the applicants is that the scrap generated in the factory could be treated like any other input brought into the factory by virtue of the explanation under Rule 57A which covers the goods manufactured in the factory of production and which are used within the factory of production in or in relation to the manufacture of the final product. We observe that the scrap generated in the appellant’s factory has to be dealt with in terms of the specific provision for scrap set out under the Modvat Rules viz. Rule 57F(4). Under Rule 57F(4) since the scrap is sent outside the factory the same is liable to pay duty. The appellant’s plea is that they should be treated like any other input brought inside the factory by virtue of being notified under Rule 57A. It is observed that the inputs which are covered under Rule 57A are those which have suffered duty. These, after receipt in the factory and after the Modvat credit has been taken therefor, are allowed to be removed outside the factory in terms of Rule 57F(2) for certain specified purposes. It is admitted position that the scrap which has been generated during the course of the manufacture of the final product in the appellant’s factory has not suffered any duty. The question of taking any Modvat credit in respect of the same and this being covered under Rule 57F would not arise. The facility of Rule 57F has been provided for to take care of the exigencies of where the manufacturer may have to send out some of the inputs in respect of which Modvat credit has been taken without having to pay duty for the reason that Modvat credit has already been taken. The scrap generated does not fall in that category. Further a plea has been taken that the Department has issued Trade Notices for the removal of the scrap generated under Rule 57F(2). In the present case, as held in the order by the Tribunal, this Trade Notice issued on 18-5-1989 would not be available in respect of the goods pertaining to the period 20th July, 1988. In any case the executive instructions which are contrary to the specific statutory provisions cannot be taken to have force of law. In view of the above we hold that no question of law as urged arises for reference. The Reference Application is therefore dismissed.