2003 (11) TMI 505 - AT - Central Excise

Summary

Issues: Refund claim under Rule 173L for rejected goods - Interpretation of 'such goods' vs. 'class of goods' - Eligibility for refund under Rule 173L for rectified goods.

In this case, the appellants had initially cleared Mono Ethylene Glycol (MEG) on payment of duty, but due to an accident during transportation, a portion of the MEG was lost, and the remaining quantity was rejected as 'off spec' and sent back to the factory for rectification. The rectified MEG was then cleared again on payment of duty, and a refund claim under Rule 173L was filed. The Commissioner (Appeals) rejected the claim, stating that the rectified goods were not eligible for refund as they were not of the same quality as the originally cleared goods, even though they were in the same tariff heading.

Upon review, the Tribunal analyzed the term 'such goods' in Rule 173L, distinguishing it from 'class of goods.' The Tribunal referred to previous cases to clarify that 'goods of the same class' do not necessarily mean 'same goods.' Citing the case of Insulated Conductors Pvt. Ltd., it was established that similarity in tariff heading could be sufficient for eligibility. The Tribunal also mentioned the case of Indian Dyestuff Industries Ltd., where goods in the same heading were considered eligible. Consequently, the Tribunal disagreed with the Commissioner (Appeals) and held that the rectified MEG should not be denied the benefit of Rule 173L, as they were still within the same tariff heading.

In conclusion, the Tribunal allowed the appeal, emphasizing that the rectified MEG and the original MEG, though different in quality, were both variants of MEG and should not be treated as distinct goods for the purpose of refund eligibility under Rule 173L. The Tribunal found no valid reason to deny the refund claim of Rs. 7,328, thereby ruling in favor of the appellant and granting the refund.