1992 (3) TMI 190 - Commissioner - Central Excise

Summary

Issues:
- Refund of Central Excise duty under Rule 173L of Central Excise Rules, 1944
- Interpretation of the term 'remade' in the context of manufacturing process
- Double taxation on the same goods

Analysis:
The case involves an appeal against an order issued by the Assistant Collector of Central Excise, Bangalore IVth Division regarding the refund of Central Excise duty under Rule 173L of Central Excise Rules, 1944. The appellant, a company, was initially granted a refund of Rs. 48,195 for a 'bucket' returned to their factory. However, a show cause notice was later issued, alleging that the bucket was not subjected to processes specified under Rule 173L, leading to a demand for the refund amount under Section 11A of the Central Excises and Salt Act, 1944. The Assistant Collector ordered the recovery of the refund, prompting the appeal.

During the proceedings, the appellant's representatives relied on various legal decisions to support their case. The show cause notice highlighted that the bucket was not subjected to processes amounting to remaking or manufacturing as defined in the Act. The Assistant Collector's interpretation of the term 'remade' as equivalent to remanufacture or manufacturing process was challenged, emphasizing the need to consider Rule 173H in conjunction with Rule 173L. It was argued that the processes carried out on the returned bucket, including welding and grinding, fell within the ambit of Rule 173L, making the refund valid.

The appellant's argument against double taxation on the same goods was supported by legal precedents, including a decision by the West Regional Bench, Bombay, and the Special Bench of CEGAT. These cases established that goods returned to the factory after payment of duty should not suffer double taxation, entitling the appellant to a refund. The judgment also referenced a decision by the Calcutta High Court reinforcing the principle of avoiding double duty on the same article. Ultimately, the impugned order demanding the refund was set aside, and the appeal was allowed with consequential relief to the appellant, emphasizing the right to a refund for duty paid twice on the same goods.