Fresh excise duty on reprocessed returned goods needs concrete proof of manufacture; absent that, second levy fails.

Goods received back under Rule 173H for reprocessing were not subject to a fresh duty demand because the Department failed to produce concrete evidence that the post-return process amounted to manufacture or deemed manufacture under Chapter Note 3 to Chapter 32. The record, including the panchnama, did not establish the precise process or show that the goods changed character in the manner required to attract renewed excise liability. Since the goods had already suffered duty on original clearance, a second levy was unsustainable absent proof of a fresh excisable event; the duty demand and penalty were therefore set aside.

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Issues: Whether goods received back under Rule 173H of the Central Excise Rules, 1944 for reprocessing could be subjected to duty again on the footing that the reprocessing amounted to manufacture under Chapter Note 3 to Chapter 32 of the Central Excise Tariff Act, 1985.

Analysis: The goods had been received back under Rule 173H after the prescribed procedure and the Department had not furnished tangible evidence showing the precise process allegedly undertaken so as to constitute manufacture or a process akin to manufacture. The record, including the panchnama, did not disclose the necessary particulars of the alleged manufacture, and the departmental material did not establish that the reprocessing changed the character of the goods in the manner asserted. The fact that the goods had already suffered duty at the time of their original clearance also weighed against a second duty demand in the absence of proof of a fresh excisable event.

Conclusion: The reprocessing did not justify a second demand of duty, and the duty demand and penalty were rightly set aside in favour of the assessee.

Ratio Decidendi: A second duty demand on goods received back for reprocessing cannot be sustained unless the Department proves with concrete evidence that the post-return process amounted to manufacture or a deemed manufacture attracting fresh excise liability.

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