JUDGMENT

Sen, J.-The appellant, Balaji Enterprises, purchase aluminium ingots from the market and manufactures aluminium containers which are used according to the permission granted by the Excise Authority under Rule 56A of the Central Excise Rules. The process followed for making the containers has been stated by the appellant in a letter to the Assistant Collector of Central Excise. The appellant melts the ingots, converts them into slabs, rolls them into sheets which are converted into circles. These circles are converted into containers which are sold in the market. The appellant pays duty on the containers manufactured by it in regular course. In the process of manufacturing containers, waste products such as aluminium scrap also come into existence.

2. The Central Excise Authority called upon the appellant to pay duty on the scrap manufactured by it. The appellant was compelled to pay duty on the value of the scrap at the rate of 40 per cent under Tariff Item 27(a)(i) of the Central Excise Tariff.

3. The appellant s case before the Department was that scraps generated in course of manufacture of aluminium containers by the appellant, could not be classified under T.I. 27(a)(i