2004 (2) TMI 163 - AT - Central Excise

Summary

Issues:
Refund claim rejection under Rule 173L of Central Excise Rules, 1944.

Analysis:
The appellant's refund claim of Rs. 4,11,862.23 was rejected based on proviso (iv) of Rule 173L of the Central Excise Rules, 1944. The rejection was proposed due to the appellant not paying any duty after reprocessing the goods, which were originally cleared for export under bond. The authorities rejected the claim, leading to an appeal to the Tribunal.

The original authority rejected the claim on the ground that the reprocessed goods did not belong to the same class, a ground not present in the show cause notice. This finding was deemed unsustainable. The main issue was whether the duty payable on the subsequent clearance exceeded the refund claimed. The duty leviable on the goods under exportation was Rs. 5,61,051, which was more than the original amount paid by the appellant.

The Tribunal, after hearing both sides, noted that clearances for export under bond without payment of duty do not constitute removal of goods without duty payment. Citing relevant judgments, the Tribunal clarified that export clearance cannot be considered as clearance at zero duty. Therefore, it was crucial to determine whether the refund claimed exceeded the duty payable on subsequent clearance. Since the duty payable on exportation was higher than the original amount paid, the appeal was allowed, and the lower authorities' orders were set aside. The appellant was granted consequential relief in accordance with the law.