Excise duty on scrap sale

Friends I would like to get clear understanding on applicability of the following case:-

A company having factory set up, imporing machineries from abroad using factory place as factory cum ware house and primarily doing different kind of job work, like boring, machining etc on excisable items supply by the principal manufacturers apart from trading sale of machineries.

During job work a portion of scrap material which is not returned to the principal manufactuers lying at job worker's place. Later the job worker has planning to sale the scrap of such material. Now the question is whether excise duty would be applicable on removing of such goods from job workers place, though the job worker doesn't cross the exemption limit of Rs. 1.50 Crores and not yet started any manufacturing process.