1989 (7) TMI 235 - AT - Central Excise

Summary

Issues: Interpretation of Rule 173L(3)(l)(i) regarding refund of duty on goods returned to the factory.

In the judgment delivered by the Appellate Tribunal CEGAT, CALCUTTA, the issue revolved around the interpretation of Rule 173L(3)(l)(i) concerning the refund of duty on goods returned to the factory. The Appellants argued that the notifications in question did not fix a concessional rate of duty but rather lowered the uniformly applicable rate of duty for all producers. They contended that the notifications did not debar all producers from availing themselves of the benefit of Rule 173L. The Tribunal agreed with the Appellants' interpretation, holding that a concessional rate of duty would lower the uniformly applicable rate of duty in specified circumstances, and thus, the notifications did not fix any concessional rate of duty. Consequently, the relief granted by the Collector (Appeals) was upheld, and the appeals filed by the department were rejected.

The Respondent, represented by Shri Biswas, argued that the case fell under the restrictions contained in Rule 173L(3)(l)(i), which stated that no refund would be admissible for duty paid on opened packages containing goods with concessional rates of duty or partial exemption. He emphasized that the refund would not be admissible if the goods were charged to concessional rates of duty or partial exemption for the small or cottage sector. He further contended that the reference to exemptions under Rule 8 was not limited to the small or cottage sector but applied to all manufacturers. The Order-in-Appeal analyzed the issue and concluded that if duty had been paid at a concessional rate by a notification under Rule 8 and the goods were received back in opened packages, no refund was admissible.

In his judgment, Shri K. Sankararaman analyzed the arguments presented by both sides. He agreed with the decision in a previous case cited by the Appellants, emphasizing that the exclusion for refund under Rule 173L(3) applied only to opened packages containing goods with concessional rates of duty or partial exemption applicable to the small or cottage sector. He rejected the argument that the exclusion also applied to all manufacturers, stating that such an interpretation would complicate the identification of goods and defeat the purpose of Rule 173L. Consequently, he allowed the appeals, setting aside the orders appealed against and remanding one case back to the Collector of Central Excise (Appeals) for further consideration regarding the submission of required intimation. The judgment directed the lower authorities to grant the refund due to the appellants promptly due to the considerable time that had passed since the transactions in question occurred.