2013 (9) TMI 59 - AT - Central Excise

Refund of duty - Whether mixing of reddish pan masala with fresh pan masala will amount to remade, refined or recondition in the context of Rule 173-L of Central Excise Rules, 1944, and whether it will amount to manufacture under Chapter Note 7 of Chapter 21 of Central Excise Tariff Act, 1985 - Asstt. Commissioner granted refund - Held that - Following decision of COMMISSIONER OF CENTRAL EXCISE, KANPUR Versus KOTHARI PRODUCTS (P) LTD. 2007 (8) TMI 279 - HIGH COURT ALLAHABAD , it does not amount to manufacture - there is no reason to seek reference on the questions of law - Decided against Revenue.

Summary

Issues:
1. Refund of duty paid on re-mixed products rejected by customers.

Analysis:
The case involved an appeal by the Revenue against the order of the Commissioner (Appeals) rejecting their appeal regarding the refund of duty paid on re-mixed products that were initially rejected by customers and then re-cleared by the respondent. The respondent, engaged in the manufacture of Pan Masala, claimed a refund of the duty paid at the time of the first clearance of the goods. The Tribunal noted that a similar dispute had been previously adjudicated in the case of Commissioner of Customs and Central Excise Vs. Kothari Products Ltd., where it was held that the mixing of pan masala for re-packed goods did not amount to manufacture, thus no duty was required to be paid for such re-mixed products. The Asstt. Commissioner, following the Tribunal's decision in the assessee's case, had granted the refund, which was upheld by the Commissioner (Appeals).

The Revenue contended that they did not accept the Tribunal's earlier decision and had made a reference to the Hon'ble High Court of Allahabad. However, the Hon'ble Allahabad High Court had ruled in favor of the assessee in a previous case, rendering the Revenue's appeal moot. The Tribunal, after considering the grounds of appeal raised by the Revenue, concluded that in light of the High Court's decision, there was no merit in the Revenue's appeal, and accordingly, it was rejected. The judgment reaffirmed the principle established in previous decisions regarding the non-requirement of duty payment for re-mixed products and upheld the refund granted to the respondent in this case.