2004 (2) TMI 458 - AT - Central Excise

Summary

Issues:
1. Non-return of inputs sent for processing under Rule 57F(4).
2. Duty on rejected duty paid goods under Rule 173H not available for verification.

Analysis:
1. The appellants were issued a show cause notice for not bringing back certain inputs sent for processing under Rule 57F(4) within the stipulated period. The Additional Commissioner's order failed to consider the challans provided by the appellants showing timely receipt of goods from job workers. The Tribunal held that as the goods were received within the time limit, there was no basis for demanding duty payment as per the impugned order. Thus, this part of the lower authorities' order was set aside.

2. Regarding the allegation of duty on rejected duty paid goods under Rule 173H not being available for verification, the Tribunal found the requirement for duty payment on goods not traceable in the factory perplexing. It was noted that the duty liability must be fully established by the department, especially when the goods were initially cleared after payment of duty. The Tribunal emphasized that unless it is proven that the appellants benefited from duty-free clearance by re-issuing duty paid goods, there is no duty liability. Therefore, the Tribunal concluded that the appeal on this ground also succeeds, setting aside the impugned orders passed by the lower authorities and allowing the appeal with consequential relief as per the law.