1997 (3) TMI 268 - AT - Central Excise

Summary

Issues:
Refund claim under Rule 173L denied based on consignee not returning goods for reprocessing.

Analysis:
The case involved the appellants clearing goods to a consignee who failed to take delivery due to payment issues, resulting in the goods deteriorating during storage in the transporter's godown. The appellants brought the goods back to their factory for reprocessing under Rule 173L of the Central Excise Rules, 1944, and filed a refund claim for duty paid earlier. The refund claim was rejected by lower authorities solely because the consignee did not return the goods for reprocessing. The lower appellate authority upheld this decision, leading to the appeal before the Tribunal.

The appellant argued that Rule 173L does not mandate goods to be returned only if found defective by the consignee but allows for reprocessing due to deterioration, as in this case. The appellant highlighted a previous order where a similar refund claim was admitted for deteriorated goods brought back for reconditioning. On the other hand, the JDR contended that Rule 173L requires goods to be returned by the consignee for reprocessing due to defects, and reliance on the previous order was not valid as it might have been reviewed or objected to subsequently.

Upon considering both arguments, the Tribunal analyzed Rule 173L, which allows for a refund of duty on goods returned to the factory for reprocessing, remaking, or reconditioning. The Tribunal noted that the rule does not specify that goods must be returned due to defects found by the consignee. In this case, the goods deteriorated during storage, necessitating reprocessing, which was in line with the rule's provisions. As there was no rebuttal to the appellants' claim of deterioration and reconditioning, the Tribunal found no merit in the lower authorities' decision to deny the refund claim based on the consignee not returning the goods. Consequently, the appeal was allowed, granting consequential reliefs to the appellants.