1995 (7) TMI 179 - AT - Central Excise

Summary

Issues:
- Duty liability on goods cleared for export but not exported.
- Interpretation of Rule 97A of the Central Excise Rules, 1944.
- Application of conditions for allowing goods to be returned to the factory under Rule 97A.

Analysis:
1. The case involved an appeal against an order passed by the Collector of Central Excise (Appeals) concerning duty liability on polished granite slabs cleared for export but not exported due to damage in transit. The appellants contended that duty should not be recoverable as the damaged goods were allowed to be returned to the factory under Rule 97A for reprocessing. The Collector (Appeals) upheld the duty liability.

2. The appellants argued that the jurisdictional Assistant Collector's approval for returning the damaged goods under Rule 97A implied that the goods were to be remade or subjected to similar processes in the factory. They claimed that duty should only be recoverable if the goods were disposed of otherwise than for production of goods of the same class as per Rule 97A(3). The appellants sought to set aside the Collector (Appeals) order on this basis.

3. The respondent, represented by the JDR, supported the findings of the Collector (Appeals) and urged the rejection of the appeal. The respondent maintained that duty was rightly demandable on the goods that were cleared for export but not actually exported, despite being allowed to return to the factory for reprocessing under Rule 97A.

4. Upon examination of the case record and submissions from both parties, the Tribunal noted the appellants' reliance on the Assistant Collector's letter directing the return of goods under Rule 97A. However, the Tribunal found ambiguity in whether a final order allowing the return under Rule 97A was issued. Notably, the conditions of Rule 97A, including the value of the goods upon return, were crucial for determining duty liability.

5. Rule 97A permits goods cleared for export to be returned to the factory under specific conditions. The Tribunal highlighted the importance of ensuring compliance with Rule 97A requirements, such as the value of the goods not being less than the duty originally paid. Lack of evidence regarding the satisfaction of these conditions led the Tribunal to remand the matter for re-adjudication by the original authority.

6. As the lower authorities' orders did not address whether the disputed goods met Rule 97A conditions for return to the factory, the Tribunal set aside the Collector (Appeals) order and instructed a re-adjudication with a personal hearing for the appellants. The case was remanded for further examination in line with the law and the Tribunal's observations.