2008 (6) TMI 441 - AT - Central Excise

Summary

Issues:
Appeal against grant of refund of duty under Rule 173L of the Central Excise Rules, 1944 - Entitlement to claim refund of duty paid on exported goods - Applicability of previous judgments.

Analysis:

1. Issue: Refund of duty paid on exported goods
The appeal pertains to the grant of refund of duty to the respondents under Rule 173L of the Central Excise Rules, 1944. The respondents had initially cleared two units of their product to a customer, which were later returned for reconditioning under Rule 173L. After reconditioning, one unit was cleared on payment of duty, and the other unit was exported without payment of duty. The dispute arose regarding the refund claim of duty paid on the exported goods. The original authority sanctioned refund only for goods cleared in the domestic market, rejecting the claim for the duty paid on the exported goods. The Commissioner (Appeals) allowed the appeal, relying on a previous Tribunal decision, which held that refund of duty originally paid was admissible in such cases.

2. Issue: Applicability of Previous Judgments
The Revenue contended that the respondents were not entitled to claim a refund for duty paid on exported goods, citing a decision of the Hon'ble Madras High Court in Sabari Starch case. The respondents argued that the facts of the present case differed from Sabari Starch, making the High Court's decision inapplicable. The Tribunal analyzed the facts of Sabari Starch, where the petitioner sought a refund for duty paid by another entity on reprocessed goods for export. The Tribunal distinguished this from the current case, where the respondents sought a refund for duty paid on goods they originally cleared. The Tribunal emphasized that the goods were returned for reconditioning under Rule 173L and then exported without payment of duty, aligning with previous Tribunal decisions like Metazinc case, Rajasthan Spg. & Wvg. Mills Ltd., Relaxo International, and LML Ltd. The Tribunal held that the facts of the present case supported the respondents' claim for a refund of duty paid on the exported goods.

3. Conclusion
After careful consideration, the Tribunal dismissed the appeal filed by the Revenue. The Tribunal found that the facts of the present case were distinguishable from Sabari Starch, and the decision of the Hon'ble High Court in that case was not applicable. The Tribunal upheld the appellate Commissioner's decision, emphasizing the admissibility of refund under Rule 173L(1) for duty paid on goods that were reconditioned and subsequently exported without payment of duty. The appeal was thus dismissed, affirming the respondents' entitlement to claim a refund for the duty paid on the exported goods.