1999 (11) TMI 255 - AT - Central Excise

Summary

Issues:
- Refund claim under Rule 173L of Central Excise Rules
- Interpretation of Rule 173L regarding re-making of damaged goods
- Admissibility of refund claim when goods are mixed with fresh materials
- Value of goods at the time of return compared to duty paid
- Precedents set by earlier tribunal decisions

Analysis:
The judgment involves three appeals by Revenue challenging a common order-in-appeal allowing a refund claim under Rule 173L of Central Excise Rules. The case revolves around M/s. Kothari Products (P) Ltd. manufacturing Pan Masala, which was returned to the factory for re-making after being found damaged. The Revenue rejected the refund claim, arguing against mixing damaged Pan Masala with fresh material, stating it would spoil the quality. However, the Commissioner (Appeals) allowed the claim based on a previous order in favor of the Respondents.

The main contention was whether Rule 173L permits re-making damaged goods by mixing them with fresh material. The Revenue argued against this practice, emphasizing the value of goods at the time of return compared to duty paid. The Respondents cited precedents where similar re-making processes were allowed by the Tribunal, highlighting the absence of a specific stipulation in Rule 173L requiring separate reprocessing of returned goods.

The Tribunal analyzed Rule 173L, noting it allows for re-making, refining, or reconditioning of returned goods without specifying the method. It observed that the Respondents followed proper procedures by filing D-3 intimation and mixing damaged Pan Masala with fresh material. The Tribunal found no restriction in the rule against such re-making practices, citing previous cases where similar processes were permitted.

Regarding the value of goods at the time of return, the Tribunal noted the Revenue failed to provide evidence supporting their claim that the value was less than duty paid. Additionally, the Tribunal upheld the Commissioner's decision based on the rejection of Revenue's previous appeal and subsequent ROM application.

In conclusion, the Tribunal rejected all three appeals by Revenue, finding no reason to interfere with the Commissioner's order. The judgment affirms the admissibility of refund claims under Rule 173L, allowing for re-making damaged goods by mixing them with fresh material, provided proper procedures are followed, and the value of goods meets the duty paid requirements.