1983 (5) TMI 260 - AT - Central Excise

Issues Involved:
1. Refund claim under Rule 173L of the Central Excise Rules, 1944.
2. Submission of original duty-paying documents.
3. Correlation and identity of returned goods.
4. Condition of goods upon return (packed vs. loose).
5. Concessional rate of duty applicability.
6. Jurisdiction and adherence to remand order by lower authority.
7. Compliance with Rule 173L(3)(i) regarding opened packages and concessional rates.
8. Production of duty-paying documents and other records.
9. Refund eligibility for duty paid through RG-23 account.

Detailed Analysis:

Refund Claim Under Rule 173L:
The respondents claimed a refund of Rs. 25,745.25 under Rule 173L for goods initially cleared on payment of duty and subsequently returned to the factory. The Assistant Collector initially rejected the claim due to the non-submission of duty-paying documents and the inability to correlate the returned goods with the original goods.

Submission of Original Duty-Paying Documents:
The Assistant Collector rejected the refund claim on the grounds that the original duty-paying documents were not submitted. The Appellate Collector, however, found that the necessary documents were with the Range Superintendent and that it was incorrect to say the appellants did not submit them.

Correlation and Identity of Returned Goods:
The Assistant Collector noted the loss of identity of the returned goods due to re-processing with other goods. The Appellate Collector countered this by stating that a broad correlation would suffice and that it would be harsh to deny the benefit of Rule 173L solely on this ground.

Condition of Goods Upon Return:
The goods were initially cleared in packed condition but returned in loose condition. The Appellate Collector found this irrelevant, noting that the goods could not be reprocessed without melting, and it was not practicable to remelt small quantities separately.

Concessional Rate of Duty Applicability:
The Assistant Collector held that the goods were cleared at a concessional rate of duty under Notification No. 164/75 and 49/76. The respondents argued that these notifications fixed only the effective rate of duty, not a concessional rate. The Appellate Collector did not specify the concessional rate or the exemption notification under which the original duty was paid.

Jurisdiction and Adherence to Remand Order:
The Appellate Collector's remand order directed the Assistant Collector to re-determine the case while considering a broad correlation of goods and examining the original D-3. The Assistant Collector's subsequent adjudication was contested as exceeding the parameters set by the remand order. The respondents cited judicial precedents to argue that the Assistant Collector should have confined himself to the directions of the remand order.

Compliance with Rule 173L(3)(i):
The Collector of Central Excise argued that no refund is admissible for goods received in opened packages containing goods with concessional rates of duty. The Appellate Collector's observation that refund arises as soon as duty-paid goods are received back was contested as contrary to Section 11B of the Central Excises and Salt Act, 1944, and Rule 173L.

Production of Duty-Paying Documents and Other Records:
The necessity of producing duty-paying documents and other records was emphasized by the Revenue to determine the admissibility of the refund claim. The Appellate Collector's view that production of records was not very material was contested by the Revenue.

Refund Eligibility for Duty Paid Through RG-23 Account:
The Assistant Collector and the Appellate Collector both noted that refund of duty paid through the RG-23 account is not permissible in cash or by cheque under Rule 56A. The amount involved should be credited to the RG-23 account of the respondents.

Conclusion:
The appeal filed by the Collector of Central Excise was rejected. The tribunal directed that the relief granted by the Appellate Collector be provided to the respondents within two months. The tribunal also held that the notifications in question did not fix a concessional rate of duty but an effective rate, and therefore, the respondents were entitled to the refund. However, for duty initially paid through the RG-23 account, the refund should be credited to the same account, not issued in cash or by cheque.

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