2008 (1) TMI 699 - AT - Central Excise

Summary

Issues:
Refund claim on duty paid returned goods under Section 11B of Central Excise Act, 1944.

Analysis:
The appellant filed a refund claim on duty paid returned goods in June 2003, which was sanctioned by the Adjudicating Authority under Section 11B of the Central Excise Act, 1944. Subsequently, the Revenue appealed before the Commissioner (Appeals), who partially allowed the refund claim. The duty paid goods were returned to the appellant's factory for processing and re-conditioning, falling under Rule 16 of the Central Excise Rules, 2002, allowing for Cenvat credit as input on returned goods. Notably, there is no provision for refund of duty as in the earlier Rule 173L of the erstwhile Central Excise Rules, 1944. The Adjudicating Authority recognized the appellant's entitlement to a refund of duty on the returned goods used for processing or manufacturing in the factory. However, the Commissioner (Appeals) only partially allowed the refund claim, citing the proviso to Rule 173L of the erstwhile Central Excise Rules, 1944, in conjunction with Section 11B of the Central Excise Act, 1944.

Upon review, it was established that Rule 16 of the Central Excise Rules, 2002 governs the availing of credit on duty paid returned goods, rendering refund inadmissible. Consequently, the presiding judge found no grounds to interfere with the Commissioner (Appeals) order and rejected the appeal. The judgment was dictated and pronounced in open court, settling the matter conclusively.