1991 (1) TMI 291 - AT - Central Excise

Summary

Issues:
Claim for refund under Rule 173L of the Central Excise Rules based on non-compliance with procedural requirements.

Detailed Analysis:

1. The appeal was against the rejection of a claim for refund by the Collector of Central Excise (Appeals) and the A. C. of Central Excise, Jamnagar, concerning the reprocessing of soda ash consignments. The rejection was based on alleged non-compliance with Rule 173L of the Central Excise Rules, specifically regarding the drawing of samples and proper segregation of goods during reprocessing.

2. The appellants, manufacturers of chemicals, filed D-3 declarations for consignments received back for reprocessing. The adjudicating authority rejected the refund claim for consignments where no samples were drawn and where the provisions of Rule 173L were not followed. The claim was partially sanctioned for three consignments but denied for the remaining six lots. The Collector (Appeals) upheld this decision, citing non-compliance with procedural requirements.

3. The appellants argued that they complied with Rule 173L by filing D-3 declarations promptly and allowing inspections. They contended that the department's failure to draw samples did not justify rejecting the claim. They also asserted that mixing goods during reprocessing did not violate the rule. Referring to precedents, they claimed the entire duty paid should be refunded, challenging the partial sanctioning of the claim.

4. The Respondent, however, highlighted defects in the claim, alleging that the goods were not received back in original packing and were not identifiable due to damage. This, according to the Respondent, justified the rejection of the claim to the extent done by the authorities.

5. The Tribunal found that the rejection of the claim was primarily based on the failure to draw samples and improper reprocessing procedures. It noted that there was no specific statutory requirement for appellants to ensure sample drawing by the department. The rejection on this ground was deemed unjustified as any non-compliance was on the part of the authorities. The Tribunal also found the rejection based on non-compliance with rules vague and inconsistent, especially since a subsequent order by the same Collector (Appeals) allowed a similar claim.

6. The Tribunal further emphasized that the loss of goods' identity during reprocessing did not disqualify the refund claim, citing precedents. It clarified that the refund should be based on the full quantity of lots received back, not just the reconditioned quantity. The authorities were deemed unjustified in rejecting the claim, and the appeal was allowed, directing the department to calculate and grant the appropriate refund to the appellants.