2000 (11) TMI 179 - AT - Central Excise

Summary

Issues: Revenue's appeal against the order allowing refund claims based on remixing of returned goods with fresh material under Rule 173L of Central Excise Rules.

Analysis:
1. Background: The appeals were filed by the Revenue against the Commissioner (Appeals)'s order allowing refund claims of the respondents under Rule 173L of the Central Excise Rules for remixing returned goods with fresh material.

2. Facts: The respondents, engaged in pan masala manufacturing, lodged refund claims for duty paid twice on goods returned due to reddish color. The Assistant Commissioner rejected the claims, stating that remixing did not qualify as reprocessing. The Commissioner (Appeals) overturned this decision, subject to reversing Modvat credit on damaged inputs.

3. Revenue's Appeal: The Revenue challenged the Commissioner (Appeals)'s decision before the Tribunal, arguing that remixing did not meet Rule 173L criteria and the returned goods had no commercial value.

4. Counter-Argument: The respondents' counsel cited previous Tribunal orders where similar claims were allowed, emphasizing that the remixing process was not prohibited by Rule 173L. Lack of evidence on the returned goods' commercial value was highlighted.

5. Tribunal's Decision: The Tribunal noted previous rulings where similar grounds were rejected, emphasizing that remixing was not prohibited by the rules. Lack of evidence on the returned goods' value and quantity post-remixing was crucial. The Tribunal upheld the Commissioner (Appeals)'s order, directing Modvat credit reversal before refund.

6. Conclusion: The Tribunal dismissed the Revenue's appeals, citing lack of merit. The decision was based on the absence of evidence supporting Revenue's claims and the binding nature of previous Tribunal rulings in similar cases. The respondents were directed to reverse Modvat credit as per the Commissioner (Appeals)'s order.