1997 (9) TMI 286 - AT - Central Excise

Summary

Issues: Interpretation of Rule 173L for refund of duty paid on returned manufactured goods.

In this case, the appellants, manufacturers of 'Silver Alloy Contacts,' supplied goods to a customer, which were later returned due to document release issues. The Departmental Officers verified the return of goods, and the appellants processed the returned goods by re-polishing, re-testing, and re-packing some pieces for another customer and remelting the rest with permission from authorities. The appellants filed a refund claim under Rule 173L, which was initially rejected by the Assistant Commissioner and upheld by the Commissioner (Appeals).

Upon hearing both parties, it was established that the appellants had followed the prescribed procedure for intimating the return of goods, returned the goods within the stipulated time limit, stored the materials separately, and maintained the required accounts. The duty was paid again upon clearance of the goods for the second time. The key question was whether the terms of Rule 173L had been fulfilled. The Tribunal analyzed that the processes undertaken by the appellants, such as re-polishing, re-testing, re-packing, remelting, and reprocessing, fell within the scope of Rule 173L. Citing a previous Tribunal case, it was determined that processes like retesting and rechecking are covered by the rule, and the term 'remade' has a broad interpretation, including transformation processes. Therefore, the appellants were found eligible for the refund under Rule 173L, as the returned goods were remade to suit the specifications of another customer. Consequently, the appeal was allowed, and the appellants were granted the refund.