1997 (5) TMI 449 - AT - Central Excise

Summary

Issues:
1. Claim for refund of duty under Rule 173L rejected by Assistant Commissioner.
2. Appeal against rejection upheld by first appellate authority.
3. Dispute over non-rendering of accounts to Assistant Commissioner within prescribed time limit.
4. Appellants' submission of maintaining records and fulfilling other conditions of Rule 173L.
5. Argument on the mandatory nature of Rule 173L (3) by the Respondent.
6. Comparison of decisions by both parties regarding the technical violation of Rule 173L.

Analysis:
The appeal before the Appellate Tribunal CEGAT CALCUTTA involved a dispute over the rejection of a refund claim of duty amounting to Rs. 23,433 under Rule 173L by the Assistant Commissioner of Central Excise. The appellants, engaged in the manufacture of Slurry Explosives, had returned a quantity of duty-paid explosives to their factory due to quality defects. The processed explosives were re-cleared after payment of duty, but the claim was denied for not rendering accounts to the Assistant Commissioner within the specified time limit. The first appellate authority upheld the rejection, leading to the appeal before the Tribunal.

The appellants argued that they had maintained records and fulfilled all conditions of Rule 173L except for the timely rendering of accounts. They contended that the denial based solely on this procedural lapse was unjust, citing precedents where refunds were not denied for similar technical reasons. On the other hand, the Respondent emphasized the mandatory nature of Rule 173L (3) and the need for strict adherence without room for relaxation.

After considering both sides' submissions, the Tribunal noted that the return, reprocessing, and re-clearance of goods were undisputed, and records were maintained satisfactorily. The primary issue was the failure to render accounts to the Assistant Commissioner within the stipulated period. The Tribunal highlighted that this procedural requirement aimed to ensure the Officer's subjective satisfaction and prevent misuse of the facility. Since the Department was content with the maintained accounts and the records were eventually submitted upon request, the Tribunal found the appellants' case aligned with previous decisions where strict technical violations did not warrant refund denials.

The Tribunal distinguished the Gujarat High Court decision cited by the Respondent, emphasizing that it did not primarily concern the interpretation of Rules 173L (3) & (4) but provided context-specific observations. Consequently, the Tribunal allowed the appeal, granting consequential reliefs to the appellants based on the applicable precedents and the specific circumstances of the case.