Reprocessed defective excisable goods already duty-paid do not attract a fresh excise levy on re-clearance.

Excisable goods that had already suffered duty and were returned only because they were defective did not attract a fresh levy when reprocessed and cleared again. The court applied the earlier Division Bench view that reprocessing in these circumstances did not amount to a new duty-triggering manufacture for purposes of additional excise demand. The revenue's challenge therefore failed, and no further duty was payable on the reprocessed goods.

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Issues: Whether reprocessing of defective excisable goods received back from another unit amounts to manufacture so as to attract a fresh duty demand.

Analysis: The goods had already suffered duty when first cleared from the manufacturing unit. They were returned only because they were defective, and after reprocessing they were sent back for sale. In view of the prior payment of duty and the fact that the process of reprocessing in these circumstances did not justify a fresh levy, the dispute was covered by the earlier Division Bench view that no further duty could be demanded on such repaired or reprocessed goods.

Conclusion: The issue was answered in favour of the assessee and against the revenue; no fresh duty was payable on the reprocessed goods.

Final Conclusion: The revenue's challenge failed and the demand was not sustained, leaving the assessee free from the disputed duty liability.

Ratio Decidendi: Where excisable goods have already suffered duty and are returned only for reprocessing of defects, no fresh duty can be demanded merely because the goods are reprocessed and cleared again.

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