2000 (9) TMI 546 - AT - Central Excise

Summary

Issues:
1. Refund claim rejection based on interpretation of Rule 173L of Central Excise Rules, 1944.
2. Commissioner (Appeals) finding fault with Assistant Commissioner's interpretation.
3. Dispute over the admissibility of duty refund due to full duty exemption on reprocessed goods.

Issue 1: Refund Claim Rejection
The case involved M/s. Fort Williams Co. Ltd. lodging a refund claim for duty paid once on wire ropes cleared, rejected, reprocessed, and cleared again under duty exemption. The Assistant Commissioner rejected the claim citing Rule 173L, stating the refund cannot exceed the duty payable after reprocessing. The Assistant Commissioner's view was that since duty was not paid again on reprocessed goods due to exemption, no refund was admissible.

Issue 2: Commissioner (Appeals) Decision
Upon appeal, the Commissioner (Appeals) disagreed with the Assistant Commissioner's interpretation. The Commissioner held that although duty was "payable" on reprocessed goods, it was not actually paid due to the exemption. The Commissioner deemed the Assistant Commissioner's order as improper and allowed the appeal, stating that the duty was not paid on the reconditioned goods as per the exemption notification.

Issue 3: Admissibility of Duty Refund
The Revenue appealed the Commissioner's decision, arguing that if duty payability is reduced to nil due to an exemption, the refund admissibility should also be reduced to nil as per Rule 173L. The Tribunal, after hearing the Revenue's arguments and examining previous orders, determined that the refund amount should be restricted by the duty "payable" on reprocessed goods. The Tribunal clarified that if duty payability is reduced to zero due to an exemption, the refund amount would also be zero. Thus, despite the exemption, the refund claimed was deemed inadmissible. The Tribunal disagreed with the Commissioner's view that duty was payable on reprocessed goods and upheld the Revenue's appeal, setting aside the Commissioner's decision.

In conclusion, the Appellate Tribunal allowed the Revenue's appeal, emphasizing that the refund amount should be limited by the duty payable on reprocessed goods, even if duty exemption applies, leading to the inadmissibility of the claimed refund in this case.