Reprocessed cement and voluntary duty payment: returned goods were not fresh clearances, and no refund lay for time-barred demand payment.

Cement returned to the factory for reprocessing under Rule 96ZV and cleared without duty was not treated as a fresh production clearance for Notification No. 198/76-C.E.; the reprocessed quantity could not be counted again toward the concessionary clearance limit, so the claim failed on that point. Duty paid on a demand later alleged to be time-barred was not refundable where the payment was voluntary and there was no coercive recovery, even though a dissenting view would have allowed refund on limitation grounds. The overall result was that the assessee could not include the returned cement in the concession computation and could not recover the duty already paid.

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Issues: (i) whether cement returned to the factory, reprocessed under Rule 96ZV of the Central Excise Rules, 1944, and delivered without payment of duty could be included in the clearance figures for claiming benefit under Notification No. 198/76-C.E. dated 16th June, 1976; (ii) whether duty paid pursuant to a demand later alleged to be time-barred was refundable.

Issue (i): whether cement returned to the factory, reprocessed under Rule 96ZV of the Central Excise Rules, 1944, and delivered without payment of duty could be included in the clearance figures for claiming benefit under Notification No. 198/76-C.E. dated 16th June, 1976.

Analysis: The concession under the notification was linked to clearances made in the course of production and to the incentive scheme for higher output. Cement merely returned for reprocessing and then delivered under Rule 96ZV was not treated as a fresh production clearance for the purpose of reaching the concession limit. The reprocessed quantity had already formed part of the earlier duty-paid clearances or the base calculations, and could not be counted again for the notification benefit.

Conclusion: The reprocessed 201.10 tonnes of cement was not includible in the concessionary clearance computation, and this issue was decided against the assessee.

Issue (ii): whether duty paid pursuant to a demand later alleged to be time-barred was refundable.

Analysis: The majority held that although the demand was assumed to be time-barred, the amount paid was in fact legally due to the revenue, and there was no coercion or enforced recovery. Since the payment was made voluntarily, even if under protest, the department was entitled to retain it. A dissenting view held that the demand was barred by limitation and the amount should be refunded, but that view did not prevail.

Conclusion: The paid duty was not refundable, and this issue was decided against the assessee.

Final Conclusion: The appeal failed because the disputed cement could not be counted for concessional clearance purposes and the amount already paid was not liable to be returned.

Ratio Decidendi: Goods returned for reprocessing and delivered under a reprocessing rule are not fresh clearances for the purpose of an incentive notification tied to production clearances, and a duty payment made voluntarily without coercion is not refundable merely because the demand is later said to be time-barred.

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