Duty credit on returned damaged glass was allowed where Rule 16 covered reprocessing as remaking.

Rule 16 of the Central Excise (No. 2) Rules, 2001 allows duty-paid goods returned to the factory for remaking, refining, re-conditioning, or any other reason to be received back and treated as inputs for CENVAT credit purposes. Damaged glass returned for reprocessing was held to fall within this provision, as the process of reworking such goods aligns with the rule's coverage of remaking. On that basis, duty credit on the returned damaged glass was admissible, and the contrary order was set aside.

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Issues: Whether duty credit was admissible on damaged glass returned to the factory under Rule 16 of the Central Excise (No. 2) Rules, 2001.

Analysis: Rule 16 permits goods on which duty has been paid and which are subsequently returned to the factory for being remade, refined, re-conditioned, or for any other reason to be received back and treated for CENVAT credit purposes as inputs. The Tribunal also noted its earlier view that damaged glass returned for reprocessing falls within the expression "remaking", and that the same expression appears in Rule 16. On this basis, the returned damaged glass was held to be covered by the rule.

Conclusion: The appellants were entitled to duty credit on the damaged glass received back in the factory, and the contrary order was set aside.

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