2002 (1) TMI 118 - AT - Central Excise

Summary

Issues:
Refund claim rejection under Rule 173L.

Analysis:
The appellants, manufacturers of leather footwear, cleared goods to customers who later returned them. The appellants re-processed and exported the goods without duty payment, filing a refund claim of Rs. 4,83,139 under Rule 173L. Authorities rejected the claim citing Clause (iv) of Rule 173L(1). Appellants argued precedent from a similar case where refund was allowed. The lower appellate authority, however, followed a different case law. The Tribunal analyzed precedents - Metazinc (India) Ltd. and Enzo Chem Laboratories Pvt. Ltd. The Metazinc case allowed refund if duty on re-processed goods didn't exceed duty paid initially. The Enzo Chem case required actual duty payment on re-processed goods. The Tribunal found Enzo Chem decision per incuriam due to conflicting views and followed Metazinc, allowing refund subject to Clause (iv) restrictions.

The extent of refund was then deliberated. The appellants claimed the duty payable on re-processed goods was Rs. 3,65,878, which was also the amount they sought in the refund claim. Despite a possible error in the claim, the Tribunal upheld the limit set by Clause (iv) at Rs. 3,65,878, as found by the adjudicating authority. The Tribunal directed the refund of this amount within three months, setting aside the lower authorities' decisions. The appeal was allowed to this extent, granting the refund as per the restricted amount under Rule 173L.