Excise duty on waste

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Ashish Pardesi (Querist)
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29 June 2015 Dear sir,

we are clearing HDPE waste under chapter 39151000, we are availing notification 30/2004 on our final product and taking exemption on it, now we want to sell waste of our final product, so can you please tell me, if we have to charge excise duty on waste or not?

CA Himanshu Ojha

CA Himanshu Ojha (Expert)
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29 June 2015 Please refer Notification.89/95 -CE dt.18.5.1995 - Exemption to waste and parings arising during manufacture of exempted goods.

In exericse of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts waste, parings and scrap arising in the course of manufacture of exempted goods and falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon which is specified in the said Schedule:
Provided that nothing contained in this notification shall apply to waste, parings and scrap cleared from a factory in which any other excisable goods other than exempted goods are also manufactured.

Explanation.- For the purpose of the notification, the expression "exempted goods" means excisable goods which are chargeable to "Nil" rate of duty or, are exempted from the whole of the duty of excise leviable thereon by any other notification (not being a notification where exemption from the whole of duty of excise is granted based upon the value or quantity of clearances made in a financial year) issued under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 or sub-section (1) of section 5A of the said Act.

Based on the above please decide whether your products are covered under this notification or not. If it is covered, no need to pay excise duty else you are liable.

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