2005 (8) TMI 545 - AT - Central Excise

Summary

Issues:
- Refund under Rule 173H of Central Excise Rules
- Eligibility for refund under Rule 173L of Central Excise Rules
- Commissioner's decision on refund and credit of duty paid on capital goods

Analysis:
1. The main issue in this case revolves around the refund claimed by the appellant under Rule 173H of the Central Excise Rules. The appellant had cleared capital goods to their sister concern, who later returned the goods as they were found unsuitable. The appellant then submitted an intimation under Rule 173H upon receiving the goods back and applied for a refund under Rule 173S. The Commissioner (Appeals) allowed the credit of duty paid on the machine but rejected the refund claim under Rule 173H. The Revenue contended that the refund under Rule 173H is not applicable in this scenario as the goods were not manufactured by the appellant and cleared on payment of duty but were cleared to the sister unit. The Tribunal found merit in the Revenue's appeal, stating that the Commissioner should have decided the application under the relevant provision of law, and as the refund claim was not permissible under the rules claimed by the appellant, the application deserved to be rejected.

2. Another issue raised by the Revenue was regarding the eligibility for refund under Rule 173L of the Central Excise Rules. The Revenue argued that Rule 173L pertains to goods returned to the factory for repair, reprocessing, or similar processes, which was not the case with the goods in question as they were initially cleared to the sister unit. The Tribunal upheld the Revenue's contention, stating that the goods were not received back for repair or reprocessing after being cleared on payment of duty, thus supporting the Commissioner's decision to reject the claim under Rule 173L.

3. Lastly, the Tribunal addressed the Commissioner's decision to allow the credit of duty paid on the capital goods. The Tribunal found that since the application for refund was made under Rule 173H, the issue of taking credit was beyond the scope of the refund application. Therefore, the Tribunal set aside the Commissioner's decision to allow the credit of duty paid on the machine, as it was not sustainable under the circumstances of the case.

In conclusion, the Tribunal allowed the Revenue's appeal, emphasizing that the refund claim under Rule 173H was not maintainable in this case, and the Commissioner should have rejected the application as no refund claim permissible under the rules claimed by the appellant.