Central excise duty on re-clearance of returned goods is not a fresh levy absent further manufacture.

Central excise duty is attracted on removal of manufactured goods from the factory, and a second levy cannot arise merely because the same goods were returned and cleared again, unless they had undergone a further process amounting to manufacture. On the stated facts, the goods were not shown to have been subjected to any manufacturing process after return, so their re-clearance did not create a fresh incidence of duty. The earlier duty payment on the first removal did not justify taxing the same goods twice. The second levy was therefore unsustainable, and the refund claim was allowable.

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Issues: Whether central excise duty was payable again on the second removal of the same goods after their return to the factory, and whether the duty paid on such second removal was refundable.

Analysis: Excisability of manufactured goods arises when they are removed from the factory of manufacture under the Central Excise law. Mere export, return to the factory, or re-clearance of the same goods does not create a new product or a fresh incidence of excise duty, unless the goods have undergone a process amounting to manufacture. On the facts, the department did not contend that the dumper, on its return, was subjected to any process constituting manufacture. The earlier payment of duty on first removal did not justify a second levy merely because the goods were subsequently brought back and cleared again.

Conclusion: The second levy of duty was not sustainable and the refund claim was allowable.

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