Returned goods for repair: excise duty cannot be demanded without evidence they are different goods or that repair amounts to manufacture.

Duty could not be demanded on returned flow meters sent for repair where the original clearance records, invoices and serial numbers could identify the goods as the same items earlier cleared. The Revenue could not reject the assessee's claim merely because a departmental verification report was absent, when no evidence showed that the returned goods were different or that the repair activity amounted to manufacture of fresh goods. Prior Tribunal authority on returned goods supported this approach, and the assessee's claim was accepted with the demand held unsustainable.

---

---

Issues: Whether the returned flow meters received for repair could be treated as different goods so as to deny the benefit of repair under the excise rules and demand duty, and whether the absence of departmental verification report justified rejection of the assessee's claim.

Analysis: The original invoices under which the flow meters were earlier cleared were permanent records and could have been compared with the serial numbers and particulars of the returned goods noted by the authorities. Where such material was available, the Revenue could not ignore it and merely assert that the goods brought back for repair were different from those originally cleared. There was no evidence that the returned goods were different from the original clearances, and no case was made that the repair activity amounted to manufacture of fresh goods attracting excise duty. The assessee's position was supported by prior Tribunal authority on similarly returned goods sent for repair.

Conclusion: The assessee's claim was accepted, the departmental rejection was held unsustainable, and the demand could not be maintained.

Final Conclusion: The appeal succeeded and the impugned order was set aside, with the assessee obtaining relief on the excise duty issue.

Ratio Decidendi: Where duty-paid goods are returned for repair and the identity of the goods can be verified from original records, duty cannot be demanded merely for want of a verification report in the absence of evidence that the goods are different or that the repair amounts to manufacture.

---