2007 (12) TMI 119 - AT - Customs

EOU originally cleared goods on payment of duty - defective goods returned by customers as per T.N. 82/01 goods returned back, should be reissued to buyer within 6 months EOU filed refund claim(as goods not reissued within 6 months) which was rejected - when refund claim was rejected, they requested dept. for permitting them to clear the goods after reprocessing beyond the period of 6 months - only a procedural matter - demanding duty on same goods twice is not justified refund allowed

Summary

Issues:
Appeal against Order-in-Appeal No. 92/2006 - Duty refund on defective goods returned after six months - Jurisdictional Commissioner's Trade Notice No.82/2001 - Applicability of case laws - Procedural matter - Double taxation.

Analysis:
The appeal was filed against Order-in-Appeal No. 92/2006 regarding the refund of duty on defective goods returned after six months. The appellants, who manufacture Aluminum Alloy Wheels, were initially a 100% EOU in the Viskahpatnam Export Processing Zone (VEPZ) and later became a 100% EOU outside the zone. The issue revolved around 2522 aluminum alloy wheels received as rejects from DTA customers between 1999 to 2002. Out of these, 104 wheels were re-issued within six months, while the remaining 2418 wheels prompted a refund application for duty paid. The request for extension beyond six months was rejected based on Jurisdictional Commissioner's Trade Notice No.82/2001, emphasizing the need for re-issuance within the stipulated time.

During the proceedings, Ms. Anjali Agarwal, representing the appellants, cited relevant case laws to support their claim. The case of Lakshmi Machine Works Ltd. v. CCE, Coimbatore highlighted that duty refund on defective goods cannot be denied solely based on a delay exceeding six months. Additionally, the decision in Mafatlal Burlington Industries Ltd. v. CCE, Surat emphasized the condonable nature of delays in filing required intimation and dispatching reprocessed goods beyond the specified time frame.

Upon careful consideration, the Tribunal observed that the appellants had initially cleared the goods after paying duty and subsequently returned the defective goods with proper intimation to the Department. The delay in reprocessing and dispatching the goods was attributed to correspondence with customers. The Tribunal noted that the denial of the refund and the refusal to extend the re-issuance period lacked justification, especially considering the procedural nature of the request. The Tribunal criticized the demand for duty on the same goods twice, deeming it contradictory to taxation principles. Consequently, the appeal was allowed with consequential relief, as the impugned order was found to lack merit.

In conclusion, the Tribunal's decision highlighted the importance of procedural fairness, the applicability of relevant case laws, and the avoidance of double taxation in resolving the dispute over duty refund on defective goods returned after the stipulated period.