Second excise duty barred on returned duty-paid goods where no manufacture occurred and permission lapse was only procedural.

Duty cannot be levied a second time on goods already duty-paid and returned to the factory when no process amounting to manufacture is carried out. The failure to obtain prior permission under Rule 51A is only a procedural irregularity and does not, by itself, create liability for a fresh excise demand. Because the returned goods retained their identity and no new excisable goods came into existence, the second levy was unsustainable. Relief was therefore available despite non-compliance with the permission requirement, and the re-entry of the goods did not change their duty-paid character for excise purposes.

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Issues: Whether duty could be levied again on duty-paid goods returned to the factory, notwithstanding non-compliance with the permission requirement under Rule 51A, and whether refund or relief was barred when the goods were not processed in the manner contemplated by Rule 173L.

Analysis: The goods were admittedly returned to the factory and were not subjected to any process amounting to manufacture. In such circumstances, no new excisable goods came into existence so as to attract a fresh levy of duty. The failure to obtain permission under Rule 51A was treated as only a procedural irregularity and could not justify charging duty a second time on the same duty-paid goods. The earlier return and re-entry of the goods did not alter their character for the purpose of a second excise demand.

Conclusion: The demand of duty was not sustainable and the assessee was entitled to succeed.

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