2010 (11) TMI 902

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....penalty to the level determined by the original authority. 2. Heard both sides. 3. The relevant facts of the case, in brief, are that the appellant company (hereinafter referred to as appellant) is a manufacturer of Pan Masala containing tobacco (gutkha), Pan Masala (sada), and Rajni Scented Supari. The appellant brought different raw material and also procured duty paid laminated films. The laminated films were converted into pouches for packing the processed products like pan masala, scented supari, etc. The appellant availed credit of duty paid on laminated films which were used in the manufacture of pouches which were ultimately used for packing final products namely scented supari. In the present case, some quantity of ....

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....ate product. Some small quantities of supari in pouches were returned back as they were required to be used best before six months but the said time limit expired. On receipt of the said supari for re-processing, naturally pouches were cut open and supari was processed and cleared on payment of applicable rate of duty as supari. The goods returned back under Rule 16 are scented supari and there was no justification for bifurcating what was received by the appellant as two distinct products namely "supari" and "pouches" and to contend that the pouches were not re-processed. The demand of duty proposed on quantities which have gone into such pouches is not warranted. 5. Learned SDR reiterates the findings and reasoning of the Commissi....