1998 (11) TMI 432 - AT - Central Excise

Summary

Issues:
Claim for refund of Central Excise duty under Rule 173L for returned goods.

Analysis:
The appeal pertains to a claim for refund of Central Excise duty amounting to Rs. 24,615.83 under Rule 173L of the Central Excise Rules, 1944 for the period July, 1989 to November, 1989. The appellant, M/s. Hindustan Wires Ltd., had cleared stranded steel wires but the customers returned the goods as they were not required. The jurisdictional authorities, including the Assistant Collector of Central Excise and the Collector of Central Excise (Appeals), held that the refund claim did not fall under Rule 173L. The main contention was whether the refund claim was covered by the provisions of Rule 173L.

During the hearing, the appellant's advocate argued that the goods were brought back for re-processing due to rusting and cited relevant Tribunal decisions to support their case. On the other hand, the Respondent's representative contended that the goods were returned due to the refusal of delivery by the customers, which was not covered under Rule 173L. Reference was made to a Supreme Court decision emphasizing the importance of procedural conditions for refund benefits.

The Tribunal analyzed the facts of the case, noting that the goods were indeed returned for reconditioning as they were rusted and needed to be made market-worthy. The Tribunal interpreted Rule 173L, which allows refund for goods returned for re-making, refining, reconditioning, or similar processes. It was observed that the goods were returned to the factory for reconditioning, fulfilling the criteria of the Rule. The Tribunal highlighted the importance of maintaining detailed accounts of returned goods and processes, which were not considered by the lower authorities in rejecting the claim.

Referring to previous Tribunal and Supreme Court decisions, the Tribunal emphasized that procedural lapses should not lead to denial of refund if the essence of the Rule is complied with. The Tribunal found no indication of fraud in the present case and concluded that the refund claim should be allowed, subject to the conditions specified in Rule 173L. Ultimately, the appeal was allowed in favor of the appellant, emphasizing compliance with the Rule's requirements for granting the refund claim.