Re-credit of duty on reprocessed goods is allowed when the rules expressly permit it, and contrary circulars cannot override them.

Rule 57F(6) and Rule 57F(7), read with Rule 57G(7)(b), permitted re-credit of duty in RG 23A Part II or PLA when reprocessed goods were received back in the factory. On that reading, re-credit of duty paid on removal of inputs or semi-processed goods was consistent with the rules. A departmental circular could not displace the statutory scheme because a circular cannot override rules made under the rule-making power in the Central Excise Act, 1944. The Tribunal therefore treated the circular as ineffective to the extent of inconsistency and upheld the assessee's entitlement to re-credit.

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Issues: Whether the assessee was entitled to re-credit the duty amount in RG 23A Part II or PLA on receipt of reprocessed goods, and whether a departmental circular contrary to the rules could override the statutory provisions.

Analysis: The relevant provisions of Rule 57F(6) and Rule 57F(7), read with Rule 57G(7)(b), permitted credit after the reprocessed goods were received back in the factory, either in RG 23A Part II or in PLA maintained by the manufacturer. The assessee's re-credit of the duty paid on removal of inputs or semi-processed goods was therefore consistent with the rules. A Board circular inconsistent with the statutory rules could not supersede them, since circulars cannot override rules framed under the rule-making power under Section 37 of the Central Excise Act, 1944.

Conclusion: The assessee was entitled to take the re-credit, and the circular did not bind the Tribunal to the extent it conflicted with the rules.

Final Conclusion: The impugned orders were set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A departmental circular cannot override a valid statutory rule, and re-credit of duty is permissible where the governing rules expressly allow credit on receipt back of the processed goods.

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