Commissioner of C. Ex. Vs. Cosmos Containers

1. the question for consideration in this appeal is whether the off cut arising out of the cutting of metal sheets, required in the process of manufacture by the respondent of containers are to be classified as scrap, or as flat rolled products classifiable under heading 72.10 or 72.12 of the tariff. in the order impugned in the appeal, the collector (appeals) has accepted the submission made by the appellant before him that the off cuts or trimmings were about half to 2 inch dimension. he, after considering the explanation of the term "waste and scrap" occurring in section xv in the explanatory notes to the harmonised system of nomenclature (hsn) held that the goods would have become scrap and would not be considered to be flat product.2. reliance by the commissioner (appeals)' order of the explanatory notes to the hsn is questionable. the definition of scrap occurring in the explanatory notes is different from the definition that is found in the tariff. in view of this difference, the explanatory notes explaining the definition would not apply to the definition in the tariff. the tariff defines waste and scrap as metal waste and scrap from the manufacture of mechanical working of metal or metal goods definitely not usable as such because of breakage, cutting wear or other reasons. it is the first part of the definition that would apply.it is not denied that the goods arise from the mechanical working of metal, and the finding of fact of the commissioner (appeals) that the goods cannot be used for any other purpose for which he draws support from the size of the scrap, as also the fact that it was sold as waste has not been controverted in the department's appeal.