1998 (1) TMI 215 - AT - Central Excise

Summary

Issues:
1. Refund claim rejection based on Rule 173L for delay in re-processing and clearance of defective goods.

Analysis:
The appeal was filed by M/s. Kisan Cooperative Sugar Factory against the rejection of their refund claim amounting to Rs. 14,040 by the Commissioner (Appeals), Central Excise, Ghaziabad. The dispute arose when the appellants, manufacturers of sugar, declared 290 bags of sugar as defective and brought them back to their factory for re-processing after payment of duty. The re-processed sugar was cleared by the appellants on 15-5-1993, which was beyond the six-month period allowed under Rule 173L for re-processing and clearance of defective goods. The Assistant Commissioner rejected the refund claim on this basis, a decision upheld by the Commissioner (Appeals).

The appellant contended that the delay of 17 days in processing and clearing the goods after the lapse of the six-month period was merely a technical and procedural lapse. The appellant's counsel argued that as long as there was substantive compliance with Rule 173L, procedural lapses should not hinder the refund claim. Referring to previous tribunal decisions, the appellant's counsel highlighted cases where procedural lapses did not prevent granting benefits to the assessee.

However, the Tribunal, in its analysis, noted that the delay in re-processing and clearance of goods beyond the six-month period was not merely a procedural lapse. The Tribunal emphasized that Rule 173L(4) provides discretionary power to relax the provisions of Rule 173L, but the six-month period for re-processing remains mandatory. The Tribunal distinguished the cases cited by the appellant's counsel, stating that they did not pertain to the specific situation of processing and clearing goods after the stipulated six-month period as required by Rule 173L(3).

Ultimately, the Tribunal found no merit in the appeal and rejected it, upholding the decision of the lower authorities. The Tribunal emphasized the importance of adhering to the statutory provisions, including the mandatory six-month period for re-processing and clearance of defective goods under Rule 173L.