Reprocessed cement duty exemption upheld where damaged cement remained capable of recovery by grinding and mixing.

Eligibility for duty-free clearance of reprocessed cement under Rule 96-ZV of the erstwhile Central Excise Rules, 1944 depended on whether damaged cement brought back into the factory was capable of recovery by grinding and mixing. The report relied on by the assessee showed only that the cement had setting properties, not that it had already set and become incapable of reprocessing, and the departmental note concerned a different company dealing with already-set damaged cement. On the facts, the reprocessing method was found feasible and recovery of the damaged cement to the extent claimed was possible. The appellant was therefore treated as entitled to the Rule 96-ZV benefit, and the demand and penalty were set aside.

---

---

Issues: Whether the appellant was entitled to clear reprocessed cement without payment of duty under Rule 96-ZV of the erstwhile Central Excise Rules, 1944, on the basis that damaged cement brought into the factory had been recovered by grinding and mixing.

Analysis: The report relating to the appellant stated only that the cement had setting properties, which was not the same as a finding that the cement had already set and could not be reprocessed. The note relied on by the department pertained to another company and dealt with damaged cement that had already set. On the facts, the claimed process of mixing damaged cement with good cement and grinding it was held to be feasible, and recovery of the damaged cement to the extent claimed was found possible. The earlier clearance of the original consignment for reprocessing also supported the claim.

Conclusion: The appellant was held eligible for the benefit under Rule 96-ZV of the erstwhile Central Excise Rules, 1944, and the demand and penalty were set aside.

---