1995 (5) TMI 140 - AT - Central Excise

Summary

Issues Involved:
1. Rejection of refund claim under Rule 173L of the Central Excise Rules, 1944.
2. Interpretation of "remanufacture" and "reconditioning" under Rule 173L.
3. Applicability of Rule 173H as an alternative to Rule 173L.
4. Double payment of duty on the same goods.
5. Consideration of Tribunal decisions and their applicability.

Detailed Analysis:

1. Rejection of Refund Claim under Rule 173L:
The appeal was filed by M/s. Nicco Corporation Ltd. against the rejection of their refund claim of Rs. 17,762.00 by the Assistant Collector of Central Excise. The claim pertained to 102 meters of cable returned to the factory, reconditioned, and then cleared again on payment of duty. The Assistant Collector rejected the claim on the grounds that the reconditioning did not amount to remanufacture as required under Rule 173L.

2. Interpretation of "Remanufacture" and "Reconditioning" under Rule 173L:
The Collector (Appeals) upheld the Assistant Collector's decision, stating that rewinding the cable and packing it in a new spool did not constitute remanufacture. The appellants argued that Rule 173L is applicable for reconditioning as well and that the rule does not stipulate that the goods should emerge as remanufactured. They contended that the choice between Rule 173H and Rule 173L lies with the assessee, and they complied with the procedure for refund under Rule 173L.

3. Applicability of Rule 173H as an Alternative to Rule 173L:
The Assistant Collector suggested that the best course for the appellants was to reissue the goods without payment of duty under Rule 173H. The appellants argued that this suggestion was not appropriate as they had followed the procedure under Rule 173L. The Tribunal noted that Rule 173H allows for the return of duty-paid goods for reconditioning, repair, etc., without payment of duty, while Rule 173L allows for a refund of duty if the goods are reconditioned and cleared again on payment of duty.

4. Double Payment of Duty on the Same Goods:
The appellants argued that the same goods had suffered duty twice, once when originally cleared and again when reconditioned and cleared. The Tribunal acknowledged that if the case is not covered by Rule 173L, it would still be a case of double payment of duty, making the refund admissible under Section 11B of the Central Excises and Salt Act, 1944.

5. Consideration of Tribunal Decisions and Their Applicability:
The Collector (Appeals) relied on the Tribunal decisions in Collector v. Maize Products and Tata Finlay v. Collector, which held that processes like repacking do not constitute remanufacture. The appellants cited the Hindustan Motors Ltd. case, where reconditioning was considered sufficient for a refund under Rule 173L. The Tribunal noted that the facts of the Hindustan Motors case were different but highlighted the Principal Collector's power to relax the provisions of Rule 173L for admitting a refund claim.

Conclusion:
The Tribunal set aside the impugned order-in-appeal, stating that the case should be reconsidered by the Assistant Collector to examine the fulfillment of other requirements under Rule 173L and Section 11B. The Tribunal emphasized that the double payment of duty on the same goods should be addressed, and if all conditions are satisfied, the refund should be granted. The case was remanded for de novo examination.