Excise duty on reprocessed goods not leviable where stock was properly recorded and supervision was unsupported by authority.

Central excise duty was held not leviable on Sodium Silicate reprocessed within the factory after deterioration during storage, because the quantity was properly accounted for in the statutory records. The clearances were entered in R.G.I. and R.T. 12, and those entries were undisputed. The demand could not be sustained merely on the ground that Central Excise Officers had not supervised the reprocessing, as no authority was shown for requiring such supervision on these facts. The order of the Assistant Collector was therefore set aside in favour of the assessee.

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Issues: Whether central excise duty was chargeable on the quantity of Sodium Silicate reprocessed within the factory after deterioration during storage, where the clearances were entered in the relevant records.

Analysis: The appellants admitted that the goods had deteriorated during storage and had been reprocessed within the factory. The clearances were entered in the relevant statutory records, including R.G.I. and R.T. 12, and those entries were not disputed. The demand was based on the absence of supervision by Central Excise Officers, but no authority was shown for insisting on such supervision in the circumstances. On the facts, the quantity of Sodium Silicate was properly accounted for.

Conclusion: Duty was not leviable on the subject quantity of Sodium Silicate, and the order of the Assistant Collector was set aside in favour of the assessee.

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