1990 (5) TMI 129 - AT - Central Excise

Summary

Issues:
- Interpretation of Rule 173L for refund claims on returned consignments of refractory materials.
- Whether reprocessing returned goods with fresh materials complies with Rule 173L.
- Application of Rule 173L in cases involving mixing returned goods with new materials.
- Comparison with previous tribunal decisions on similar issues.
- Validity of the Collector (Appeals) decision regarding the reprocessing of returned goods.

Analysis:
1. The batch of appeals filed by M/s. Orissa Cement Limited challenged the Order-in-Appeal rejecting their refund claims on returned refractory materials. The Collector upheld the Assistant Collector's decision, stating that Rule 173L requires reprocessing with returned goods alone, while the appellants used a mix of returned goods and fresh materials for manufacturing bricks/mortars.

2. During the hearing, the appellants argued that they crushed returned goods, mixed them with fresh materials, and molded them into new products, complying with Rule 173L. They emphasized that the returned goods constituted a small percentage of the total quantity used and were distinguishable from unused goods. They also cited a tribunal decision supporting their case.

3. The Respondent contended that the returned goods were converted into new products by mixing them with fresh materials, not reprocessed as per Rule 173L. They argued that the returned goods lost their identity and were not remanufactured into new products, leading to a plea for rejecting the appeals.

4. The Tribunal reviewed previous decisions on similar issues involving the appellants' refund claims under Rule 173L. One decision allowed refund on returned magnesite bricks converted into mortar, while another decision upheld refund on returned goods rejected by the Assistant Collector. The Tribunal noted that the issue of reprocessing returned goods with fresh materials was crucial in the current appeals.

5. The Tribunal examined the Collector (Appeals) decision and the Additional Collector's observation that the appellants did not use returned goods alone for reprocessing. The appellants argued that they mixed returned goods with fresh materials within acceptable ratios, as clarified by previous government decisions and a clarification from the Central Board of Excise & Customs. The Tribunal concluded that Rule 173L did not restrict the benefit to cases where returned materials are used alone, allowing the appeals and granting consequential reliefs to the appellants.