2001 (1) TMI 146 - AT - Central Excise

Summary

Issues:
Refund claim rejection based on value of returned goods compared to excise duty paid at clearance.

Analysis:
The appeal was filed against the rejection of a refund claim under Rule 173L by the Commissioner (Appeals) on the grounds that the value of the returned defective goods was less than the excise duty paid at the time of clearance. The appellants, engaged in manufacturing plastic moulded furniture, received defective goods, remade them, and cleared them again on payment of duty. The revenue contended that the returned goods were essentially plastic scrap valued at around Rs. 8 per kg, less than the duty paid. The appellants argued that the goods were seconds furniture capable of resale at a higher price, citing lack of evidence from the revenue to support their claim. They referenced Tribunal decisions to support their case.

The revenue, on the other hand, maintained that a fresh market survey was conducted at the appellants' request, revealing that the value of broken/defective furniture in the market ranged from Rs. 8 to Rs. 10 per kg. The adjudicating authority concluded that the value of the returned goods fell within this range, justifying the rejection of the refund claim. Both sides presented their arguments, with the appellants emphasizing the resale value of the goods and the revenue relying on the market survey results to establish the lower value of the returned goods compared to the duty paid.

The core issue revolved around whether the returned goods were defective furniture capable of resale at a higher price, as claimed by the appellants, or mere plastic scrap, as asserted by the revenue. The Tribunal noted that unlike the cases cited by the appellants, where no evidence existed to prove the value of the returned goods was less than the duty paid, in the present case, a market survey confirmed the lower value. Drawing a distinction from previous decisions where defective goods were received in a re-usable condition, the Tribunal upheld the rejection of the refund claim based on the specific finding that the appellants had received plastic scrap, not seconds furniture. Consequently, the appeal was dismissed, finding no fault in the order-in-appeal.