2009 (12) TMI 387

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..../CE/ALLD/2007 dated 20-8-07. Cross-Objection No. E/28/08 is connected to this appeal. 1.3 The orders of the Commissioner (Appeals) dated 27-7-07 and 20-8-07 arise out of the same order in original No. 113-Dem/2007 dated 26-2-2007. 2. Heard both sides. 3.1 The relevant facts, in brief, are that the respondents are a manufacturer of P & P medicines and perfumed hair oil. They cleared coconut hair oil on payment of duty to the depots. Some quantity of such coconut oil cleared on payment of duty were returned back during the period from 23-3-04 to 6-4-04 from the depots with the remarks that they were "unfit for sale". The respondents took credit of the duty originally paid amounting to Rs. 16,90,941.89. They apparently reprocessed onl....

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....y equal to the interest leviable on the credit illegally taken. 5. Learned Consultant for the respondents submits that the goods were not marketable in the condition in which they were returned to the factory. Earnest efforts were taken to reprocess the goods and the part of the goods were reprocessed and cleared thereafter on payment of duty. Therefore, the taking of credit and utilising of credit was justified. Once they decided that the rest of the goods brought back could not be reprocessed, they have paid the credit involved on such goods on 9-4-05. Therefore, there is no irregularity. The question of demand of interest does not arise. At any rate, it is a question of interpretation of provisions of Rule 16 of the Central Excise Rul....