TaxTMI 
TaxTMI 
2025 (11) TMI 1877
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt) stock, become non-marketable because of the paper strength. Such goods are taken out of the RG 1 stock for re-processing by converting them into paper pulp and then as paper within the factory premises. After re-processing, the goods are once again entered into the finished goods record of RG-1 and the same are cleared on payment of Excise Duty. In some cases, the paper which is already in the RG-1 is required to be re-packed as per the specific requirement and directions of the buyers. In such cases, the goods are taken out of the RG-1 stock and are re-packed. After re-packing, they are accounted for in RG-1 and cleared on payment of Excise Duty. In all such cases, removal of paper on account of re-pulping and re-packing are properly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir letters to the Range officials which are duly acknowledged by them. From the year 2010, they were showing the entire quantity as cleared quantity but were separately filing the monthly letters showing re-processing details. 4. He submits that there is no allegation that the goods have been cleared out of factory premises without payment of Excise Duty. He also places reliance on the Circular No. 22/71-CX.6 dated 30.10.1971 wherein it has been clarified that re-processing of goods, duly accounted for in the RG 1 Register, within the factory is allowed. This circular is still in existence as on date, hence is binding on the Revenue officials. 5. He also relies on the case law of Modi Plastics Ltd. Vs. Commissioner of C. Ex, Patna-2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the customers. After this, once again they were taken back in the DSA records. After this, the goods were cleared from the factory on payment of Excise Duty. From the Show Cause Notice and impugned order, we do not find anything contrary to the effect that the appellant has not properly accounted for these goods or cleared the same after re-packing without payment of Excise Duty. 10. As a matter of fact, we find that whatever logic has been adopted by the adjudicating authority for dropping re-pulping of the paper, the same reasoning would equally be applicable even in the case of re-packing. In both the cases, the goods were in the RG-1 stage, which shows that they were fully manufactured product. They were removed out of RG 1, re-proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng for the appellants states that they had defective pipes in their factory which were entered in the RG-I Register and as recorded in the impugned Order passed by the lower appellate authority, after receiving complaints from customers that some of the finished goods had minor defects like hairline cracks etc., the appellants segregated such defective goods and took it for reprocessing within the plant. Some of the defective goods were made into pipe fittings and the rest became waste and scrap. The waste and scrap were also recycled in the manufacture of finished pipes and the same were cleared on payment of duty. 3. In view of the factual position that the impugned defective goods had been reused within the factory premises of t....