Modvat credit on returned defective goods denied where remanufacture produced no new commodity; specific return procedures applied.

Modvat credit was held inapplicable where defective aluminium extrusions cleared as final products were returned on the same gate pass for remanufacture by melting, because Rule 57A presupposes manufacture of a final product from inputs and the process did not create a new commodity with a different name, character or use. The proper route in such cases was the specific procedure under Rule 173H or Rule 173L, and the general Modvat provision could not be extended to cover returned goods. The credit claim was therefore not sustainable.

---

---

Issues: Whether Modvat credit could be taken on goods cleared as final products and returned on the same gate pass for remanufacture by melting.

Analysis: Rule 57A applies on the premise that the final product is brought into existence by manufacture from inputs. Returned defective aluminium extrusions, when converted again into aluminium extrusions, do not result in a new commodity with a different name, character or use. The proper course in such a situation is the specific procedure under Rule 173H or Rule 173L, and a general Modvat provision cannot be stretched to cover the case.

Conclusion: The claim to Modvat credit was not sustainable and the appeal failed.

---