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2010 (5) TMI 164 - HC - Central ExciseManufacture – processing of rejected goods – manufacture of bulk drugs - The respondent (assessee) was clearing the goods to their buyers after payment of the requisite duty. It was observed that the respondent was receiving back some of their goods from their buyers as 'rejected' under Rule 173H of the Rules and was clearing the same to their customers after carrying out processes, without payment of duty, under Rule 173H of the Rules. The adjudicating authority was of the opinion that the so-called rejected goods were reprocessed and it amounted to manufacture of the goods and hence the respondent was liable to pay duty on the reprocessed goods. – Commissioner (Appeals) and Tribunal set aside the demand – Held that: - the processes carried out by the respondent on the duty paid finished goods which were received back by them being rejected would not amount to manufacture and hence no duty was payable by the respondent on the reprocessed goods. – decided in favor of assessee
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