Archana Wadhwa, Member (J) - (1.)THE appellants are engaged in metallising Polyester Polypropylene film with silver, which in turn are used in the manufacture of the capacitor, cleared silver waste during the period October 97 to November 97 and February 98 to June 98 without payment of duty. THEy were served show cause notices on the ground that such silver waste and scrap cleared by them was properly classifiable under heading 7101.80 of CETA, 1985 attracting Central Excise duty. THE appellants during the course of adjudication contended that the said silver scraps were nothing but pure silver classifiable under heading 7101.60 attracting nil rate of duty. THE original adjudicating authority accepted the above stand of the appellants and dropped the proceedings against them.
(2.)On the review application filed by the Revenue the Commissioner (Appeals) reversed the said order and held that the silver waste and scrap is properly classifiable under heading 7101.80 and was required to be cleared on payment of duty. Hence, the present appeal.
We have heard Shri S.R. Patanakar, Ld. Consultant appearing for the appellant and Shri Vimlesh Kumar, Ld. SDR appearing for the revenue.

(3.)THE appellant's stand, as placed before the Commissioner (Appeals) in the shape of counter reply was as under :
"THE respondent stated that they are purchasing Silver wire of 99% purity which is used for metallising Polyester Polypropylene film, which in turn is used in the manufacture of the capacitor. During the process of metallising silver wire is heated at a temperature at which vapour of silver is formed in the vacuum chamber. This vapour gets deposited on the film. Since the film is narrow in width some amount of silver vapour gets deposited in the chamber, which is nothing but silver of 99% purity. This silver is removed from the chamber and the same is again sent to the job worker for converting the same again into silver wire, which is again re-used for metallising the film. From the facts stated above, it is clear that what gets deposited in the chamber and collected from chamber is silver and not waste of silver as alleged in the review order of the Commissioner Central Excise Aurangabad. It is a fact that inadvertently the respondents have given the description of goods in the challan as Silver Waste but in reality it is not a waste but is is silver which got deposited in the chamber during the process of metallising of the film. In the normal trade parlance, waste of scrap means which get generated during the process of manufacture and has hardly any value as compared to the value of prime material and sold as bhangar. Further, it is nothing but remnants which remains after the prime material is used in the manufacturing process. In the instant case what gets deposited in the vacuum chamber is silver in the form of vapour which is nothing but pure silver in the form of powder/flakes. Hence the same cannot be compared with the waste and scrap of silver. Excise and Customs Aurangabad is incorrect and not legally tenable.

Without prejudice to what has been stated in para (1) above, respondents further submit that in order to support their contention of the effect that what has been sent to the job worker is silver and not the waste and scrap of silver as contented by the department. Respondents are submitting herewith a copy of the recovery report dated 06/07/98 received from M/s. National Refinery (P) Ltd. Mumbai. (job worker) in respect of each lot sent to them careful reading of this report would reveal that the respondents have sent 13.10 KGs of Silver Powder recovered from their vacuum chamber which is 13.105 Kgs as per precision bullion balance. This report further reveals that there is a melting loss of the tune of 102.200 grms and purity loss to the tune of 94.900 grms and the fine silver wire and returned is 12.907 Kgs of silver has been made by the job worker and returned to the respondents. This also establishes that there is a recovery to the extent of 98.4% and the melting and purity loss is only 1.6%. This clearly establishes that hat is sent to the job worker is silver and not the waste and scrap of silver as contended by the Department. On this ground also observation of the Commissioner, Central Excise and Customs, Aurangabad is incorrect and not legally tenable.