2006 (8) TMI 425 - AT - Central Excise

Summary

Issues:
Refund claim rejection under Rule 173L of Central Excise Rules.

Analysis:
The appellant appealed against the rejection of their refund claim under Rule 173L of Central Excise Rules by the Commissioner (Appeals). The appellant's contention was that goods were initially cleared to a customer and later received back due to quality issues. The goods underwent retesting and realignment before being cleared to another customer. The show cause notice alleged non-compliance with the rule as the goods were cleared after six months from receipt without submitting an account of completion within the stipulated period. It was also alleged that the goods' descriptions differed between clearances. However, the appellant argued that the retesting and realignment were completed within six months, D-3 intimation was filed, and discrepancies in goods' descriptions were due to abbreviations in the first clearance. Despite presenting these facts, the refund claim was rejected.

The Revenue supported the lower authority's finding that the appellant did not fully comply with Rule 173L. However, the Tribunal noted that Rule 173L requires the manufacturer to intimate the receipt of duty paid goods via D-3 intimation and complete the process within six months, without specifying a mandate for goods to be cleared within that timeframe. In this case, the Revenue did not dispute the receipt of duty paid goods or the completion of retesting and realignment within six months. The Tribunal observed that discrepancies in goods' descriptions between clearances were due to abbreviations in the first clearance, with full descriptions in subsequent clearances. Consequently, the Tribunal found the rejection of the refund claim unsustainable and set aside the impugned order, allowing the appeal.

This judgment clarifies the requirements of Rule 173L regarding the receipt and processing of duty paid goods in a factory. It emphasizes the importance of timely intimation and completion of processes within the stipulated period, rather than mandating clearance within a specific timeframe. The Tribunal's decision underscores the need for a holistic assessment of compliance with rules and considers practical aspects such as customer availability in determining the timeline for clearance of goods.