2001 (8) TMI 734 - AT - Central Excise

Summary

Issues involved:
Refund of duty for reprocessed goods under Rule 173L of Central Excise Rules.

Analysis:
The appellant, engaged in manufacturing pre-recorded audio cassettes, sought a refund of duty for cassettes returned to their factory for re-making/re-conditioning under Rule 173L. The dispute arose when the Asst. Commissioner rejected the refund claim, citing changes in music and inlay cards during reprocessing, and alleging that the reprocessed cassettes were not of the "same class" as the original ones, violating Rule 173L(3)(iii). The Commissioner (Appeals) upheld this decision, leading to the present appeal.

The main contention of the appellant was that the returned and re-cleared cassettes were essentially the same, falling under the same Tariff heading, despite changes in music. They argued that the goods did not belong to a different class, citing various precedents supporting their position. The Tribunal agreed, emphasizing that the expression "of the same class" in Rule 173L(3)(iii) should be interpreted broadly. The essence of the goods should be considered, and in this case, both sets of cassettes were pre-recorded audio cassettes under the same Tariff heading, thus belonging to the same class. The Tribunal referenced previous cases where similar interpretations were made, supporting the appellant's stance.

Ultimately, the Tribunal set aside the impugned order and allowed all three appeals, granting the appellant the refund claim. However, the appellant acknowledged that the refund claim could not exceed the excise duty originally paid at the time of clearance, resulting in an adjusted claim amount. The appeals were allowed on these terms, providing consequential relief to the appellant.