IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO. 42 OF 2005 The Commissioner of Central Excise. ... Appellant. V/s. M/s.Deepak Fertilizers & Petrochemicals Corporation Ltd. ... Respondent. R.Ashokan with S.D.Bhosale for the appellant. Prakash Shah i/b. PDS Legal for the respondent. CORAM : V.C.DAGA AND S.J.KATHAWALLA, JJ. DATED : 16th August 2010. P.C. : Perused appeal. Heard learned counsel for the appellant- Revenue and learned counsel for the respondent. 2. This appeal has been admitted vide order dated 13th January, 2006 to consider the following substantial questions of law: (i) Whether the Hon’ble CESTAT was right in holding that dutibility of scrap would arise only if it emerges from the skillful manipulation of raw material, and since the Respondents are manufacturers of fertilizers and chemicals, no metallic scrap would therefore emerge from skillful manipulation of raw materials inputs? (ii) Whether or not the metallic scrap generated out of replacement of old pipes, structures etc. having definite Central Excise Tariff classification and cleared from the factory premises on which by sale substantial amount is accrued by the Assessee, is dutiable or not? (iii) Whether or not the ‘Nickel Catalyst’ generated during the manufacturing process form Spent Cobalt Catalyst, cleared from the manufacturing premises, is definitely classifiable under the Central Excise Tariff, which is marketable and on which the Assessee has accrued a substantial amount is dutiable or not? . 3. So far as first two questions being interrelated are the two sides of the same coin. The said questions are squarely covered in favour of the respondent by the judgment of the Apex Court in the case of Union of India v. Ahmedabad Electricity Co.Ltd., 2003 (158) ELT 3 (SC). The Tribunal has relied upon the said judgment. The relevant part of the very same judgment relevant to the issue is reproduced hereinblow: “ From the above discussion it is clear that to be subjected to levy of excise duty `excisable goods’ must be produced or manufactured in India. For being produced and manufactured in India the raw material should have gone through the process of transformation into a new product by skillful manipulation. Excise duty is an incidence of manufacture and, therefore, it is essential that the product sought to be subjected to excise duty should have gone through the process of manufacture. Cinder cannot be said to have gone through any process of manufacture, therefore, it cannot be subject to levy of excise duty. 4. We concur with the view taken by the Tribunal based on the above judgment. The scrap generated from dismantling of the machinery or the iron shed/structure of the factory can hardly be said to be a produce emerging from skillful manipulation of raw material. In this view of the matter, so far as first two questions are concerned, they are answered in favour of the Assessee and against the Revenue. 5. So far as third question is concerned, it is, no doubt, a debatable question requiring indepth consideration at the hands of the Tribunal. At one point of time we thought it proper to remand this matter to the Tribunal for consideration afresh. However, it is brought to our notice that the duty impact is hardly in the region of Rs. 14,000/-. Considering the minimal impact of duty, we do not propose to remand this matter to the Tribunal for consideration of question No.3. However, we keep this question open for being considered in appropriate matter. 6. Appeal stands disposed of accordingly with no order as to costs. (S.J.KATHAWALLA, J.) (V.C.DAGA J.)