M/S GRASIM INDUSTRIES LTD. vs UNION OF INDIA

The Supreme Court addressed the issue of whether metal scrap generated during the repair of machinery in a cement manufacturing plant constitutes 'manufacture' under the Central Excise Act, 1944. The Court held that such scrap does not amount to manufacture and is therefore not subject to excise duty under Section 2(f) of the Act. The Court overturned the High Court's decision, reinstating the Tribunal's ruling that dropped the duty demand and penalty against the assessee.