2002 (9) TMI 218 - AT - Central Excise

Summary

Issues involved: Whether the refund under Rule 173L of the Central Excise Rules, 1944 is available to M/s. Jaiswal Steel Enterprises Pvt. Ltd.

Analysis:
1. The appellants, M/s. Jaiswal Steel Enterprises Pvt. Ltd., manufactured various goods and cleared cast iron sockets to customers which were returned due to breakage or improper weight. The rejected goods were melted and remade into different products before being cleared to other customers. The Assistant Commissioner and the Commissioner (Appeals) rejected the refund claims citing non-compliance with the rules.

2. The learned Advocate for the appellants argued that they had filed necessary intimations with the Central Excise Authorities, maintained records, and remade goods like brake blocks and sockets, which should qualify for a refund. They contended that the goods remade were of the same class and referred to precedents supporting a broad interpretation of "same class" to include goods that broadly conform to the original class.

3. On the other hand, the learned DR argued that the appellants failed to maintain a detailed account of the processes undertaken on the returned goods, as required by Rule 173L. It was also contended that the remade goods were not of the same class as the original goods, thus disqualifying them from a refund. Reference was made to a Supreme Court decision where non-compliance with procedural rules led to a denial of benefits.

4. The Tribunal considered both arguments and noted that while detailed accounts were necessary, the appellants had provided sufficient evidence through material issue slips and production slips to demonstrate the remelting and remaking of goods. However, it was established that the remade goods, such as brake shoes and sole plates, were not of the same class as the original sockets. Precedents were cited to emphasize that goods remade should broadly conform to the original class to qualify for a refund.

5. Ultimately, the Tribunal ruled that the refund was admissible only for the quantity of sockets that were remade and cleared after payment of duty. The claim for a refund was limited to this extent, as the remade goods did not entirely match the original goods received back. Therefore, the Appeals were disposed of with this decision.