Central Excise - Question regarding confusion created by the word 'remade' used in Rules 173H and 173L - Clarification regarding Circular No. 2/87 - Central Excise - 2/87

Central Excise - Question regarding confusion created by the word 'remade' used in Rules 173H and 173L - Clarification regarding Circular No. 2/87 Dated 7-1-1987 [From F. No. 210/15/86-CX.6] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Question regarding confusion created by the word 'remade' used in Rules 173H and 173L - Clarification regarding . Attention is invited to the word "remade" used in Rules 173H and 173L of the Central Excise Rules, 1944. The view is that though the same word has been used in both the rules, the connotations are different. In the case of Rule 173H the process of remaking should fall short of remanufacture and in the case of Rule 173L the process of remaking should amount to remanufacture. The other view is that the word remaking means remanufacture in both the rules and hence are obvious confusion. 2. The matter was taken up with the Ministry of Law who in turn has opined as under :- "As per Rule 173H of the Central Excise Rules, 1944, the assessee may subject to the conditions specified by the Collector retain in or bring into his factory or warehouse the duty paid goods for being 'remade'. As per sub-rule (2) of the said rule, the aforesaid goods in question may be cleared again from the factory or warehouse without payment of duty subject to the condition that of any process amounting to manufacture was involved in remaking them. Thus, it becomes clear from the language of the aforesaid sub-rule that the meaning attached to the word 'remade' as used in this rule does not amount to remanufacture." Now, we come to Rule 173L of the said Rules which provides for refund of the duty paid on goods which are returned to the factory for being 'remade'. The excisable goods can be cleared from the factory only by paying the duty payable on them and the goods can be excisable only when manufacturing process is involved in their production. If the goods are returned to the factory under this rule, the same can be cleared again by paying the duty payable. It means the goods in question have gone under process of manufacturing which were returned for being 'remade'. Thus, the meaning attached to the word 'remade' as used in this rule amounts to remanufacture. Therefore, the view of the Department that in case of Rule 173H, the process of re-making should fall short of remanufacture and in case of Rule 173L of the Central Excise Rules, 1944, the process of remaking should amount to remanufacture appears to be legally correct." 3. The above opinion of the Ministry of Law has been accepted by the Board and the same may be brought to the notice of the field formations.