2012 (5) TMI 296

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..... pondents by issuance of show cause notice dated 16-7-1998. 3. The respondents had received back certain products manufactured by them on being rejected, for further processing. The department sought to initiate the proceedings to demand the duty on clearance of re-processed goods by taking resort to chapter note 11 of chapter 29. The said action was sought to be contested by the respondents while referring to the provisions of Rule 173H(2)(c) of Central Excise Rules, 1944. The contention of the respondents was upheld by the Commissioner and hence the present appeal. 4. Placing reliance in the unreported decision in the matter of Nestle India Limited v. CCE, Chandigarh delivered on 8-4-2011 [since reported in 2011 (270) E.L.T. 57 .....

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..... CCE, Chandigarh reported in 2003 (160) E.L.T. 899. 5. Undoubtedly the Tribunal in Nestle India Limited case has elaborately analysed chapter note 11 of chapter 29 while considering the issue as to whether the activity undertaken by the assessee therein amounted to manufacture within the meaning of term 'manufacture' as defined in Section 2(f) of Central Excise Act, 1944 read with the said note. However, in the matter in hand, we are rather concerned with the matter relating to the remaking or reconditioning or repairing and subjecting the products for further processing which were already manufactured and cleared on payment of duty and that was not the case in the Nestle India Limited. Rather the matter in hand is squarely covered by .....

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..... pter Note 11 of Chapter 29 in relation to the goods which were received back as rejected, held as under - "A perusal of the aforementioned facts clearly shows that the respondent had sold the bulk drugs to their buyers after paying the requisite duty. However, as the goods were received back as 'rejected', therefore, the same were reprocessed and again sold. It is a settled principle under the law that central excise duty cannot be charged on the same goods twice. In the present case, the duty had been paid on the goods after their initial manufacture and as some defect was found in the supplied goods, therefore, the same were returned by the buyers to the manufacture to reprocess the goods. Obviously, the Department could not charge duty .....

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