9911796707
TMI Blog1992 (4) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellants were cleared from its factory on payment of appropriate Central Excise duty. The said trucks were consigned to the Commandant 7th Battalion M.P. SAF Jahangirabad, Bhopal in accordance with the order received from the I.G. Police, Bhopal. 4. The appellants authorised dealer in Bhopal informed the appellants that due to non-availability of funds the said order of the I.G. Police, Bhopal was to be treated as cancelled. The authorised dealer also addressed a letter dated October 28,1983 to the appellants in this connection. 5. As the I.G. Police, Bhopal cancelled the said order, efforts were made for sale of the said 32 numbers of trucks to other buyers at Bhopal. While making such efforts it was found that the said trucks suffered from some defects requiring re-making and/or re-conditioning and/or repairing thereof, in the appellants factory. The said trucks had travelled a distance of more than 2000 Kms. to Bhopal from the appellants factory and had been lying there in open condition for nearly two months. It was accordingly decided to bring the said trucks back to the appellants factory in accordance with the provisions of the Central Excise Rules, 1944 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983. The appellants stated that at the time of the said clearance the Department never required the appellants to clear the said trucks without payment of duty. On the other hand, no objection was raised by the Department to payment of duty at the time of the said clearance. 10. On October 31,1983 the appellants submitted an application for refund of duty of Rs. 5,50,108.48 paid in respect of the said 32 numbers of trucks at the time of their initial clearance on August 30 and 31,1983. In the said refund application it was duly pointed out that the said trucks had been brought back to the appellants factory for re-making and re-conditioning. It was further stated that the necessary formalities under Rule 173H were duly complied with by the appellants and that it wanted to avail refund of Excise Duty in respect of the said goods under Rule 173L of the Rules. 11. By a letter dated November 10, 1983 the Superintendent raised certain queries in respect of the said refund claim of the appellants. By their letter dated December 14,1983, the appellants duly pointed out all the facts and circumstances relating to the return of the said goods as well as their refund claim. It was poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, learned Counsel for the appellants, also stated that the appellants duly maintained necessary accounts as required under the above-said Rule. It was only after carrying out necessary re-conditioning and/or re-making, the said trucks were cleared upon payment of duty @ 7 % In this connection, he pointed out that at the time of removing the trucks on payment of duty, no objection was taken by the Department to the above-said payment of duty and it was never pointed out that the trucks should be removed without payment of duty under Rule 173H(2). In that view of the matter, he contended that the observation of the learned Collector (Appeals) that the appellants should have cleared the trucks in question without payment of duty, is not correct. 14. Shri Bagaria, learned Counsel for the appellants, further submitted that the finding of the Collector (Appeals) that the trucks in question were returned to the factory due to non-availability of funds and cancellation of the order by the purchaser, is not correct. In this connection, he pointed out that the appellants tried to sell the trucks at Bhopal and at that time, it was discovered that the said trucks suffered defects requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er their return, was mentioned clearly. Shri Bagaria also pointed out that in the letter dated 14-12-1983 the appellants had clearly mentioned to the Superintendent, Central Excise for Hindustan Motor Range, with respect to these processes which had taken place in the factory of the appellants with respect to these 32 trucks. In the above circumstances, Shri Bagaria stated that the refund ought to have been granted to the appellants and the decision of the Collector (Appeals) in this behalf, is not in accordance with law. In support of his contention he relied on the following decisions : (i) 1986 (26) E.L.T. 353; (ii) 1984 (16) E.L.T. 505; (iii) 1989 (42) E.L.T. 474; (iv) 1991 (56) E.L.T. 484; (v) 1991 (56) E.L.T. 542 and (vi) 1990 (50) E.L.T. 271. 15. The learned JDR, Shri A. Chowdhury stated that the 32 trucks in question cleared on payment of duty, were returned to the appellants factory due to non availability of funds, by the I.G. Police, Bhopal. In that view of the matter, the contract was cancelled by the I.G. Police. It was for that reason, the trucks were taken back by the appellants. He, therefore, contended that the claim of the appellants, had been filed either un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome within the purview of Rule 173L. No re-conditioning and/or re-making within the meaning of that Rule was performed by the appellants. In such view of the matter, he stated that the order passed by the Collector of Central Excise (Appeals) is in order and the appeal may be dismissed. 17. In view of the rival contentions, the following points arise for our determination : (i) Whether the trucks numbering 32 were brought back to the factory for re-conditioning and/or re-making? (ii) Whether the processes undertaken by the appellants with reference to the above trucks amount to re-making and/or re-conditioning? (iii) Whether the formalities as required under Rule 173L of the Central Excise Rules, 1944 are complied with by the appellants on the facts and circumstances pleaded in this case? (iv) Whether Rules 173H and 173L are independent provisions and on the facts and circumstances of this case, whether the appellants are entitled for the refund of the duty paid on the first occasion, under Rule 173L of the Central Excise Rules, 1944? 18. As far as the Point No. (i) is concerned, the learned Collector (Appeals) has stated in the order that the goods were returned back b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first one sent in this regard, the appellants had stated that these trucks were cleared on payment of appropriate duty. But on observing some minor defects the same were brought back to the factory for re-making and/or re-conditioning of these vehicles. The appellants also stated in that letter that they wanted to file the claim for refund of duty on the aforesaid goods returned to factory under Rule 173L of the Central Excise Rules, 1944. If all these averments are read together, the intention of the appellants is made clear to the effect that the purpose of bringing back these trucks were for re-conditioning and re-making in view of the fact that some defects were noticed in these vehicles on the ground that they had already travelled 2000 Kms. and after that travel, they were exposed to air. Accordingly, we hold that the facts in this case, prove that the appellants had brought these trucks in question for the purpose of re-conditioning and/or re-making or repairing. Point No. (i) is answered accordingly. 19. As far as point No. (ii) is concerned, the question to be determined in this case is whether the processes undertaken by the appellants amounts to re-conditioning. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, therefore, seen that the tracks in question were repaired/re-fitted. This brings the process within the purview of re-conditioning as found in the dictionary meaning. Further, the trucks in question were re-painted, and the component parts of the trucks were made fit by de-rusting them. The batteries were re-charged and the instruments which were not working, were also restored to their normal position. All these processes undertaken on these vehicles go to show that they were brought back to their original condition, which amounts to re-conditioning of these vehicles. It cannot be said that what was done with respect to these vehicles, is only a repair work or overhauling work as had been contended by the learned JDR, Shri A. Chowdhury. Therefore, we hold that the processes undertaken on these thirty-two trucks amount to re-conditioning and/or re-making them within the meaning of Rule 173L of the Central Excise Rules, 1944. 20. This brings us to other points enumerated by us supra. As per point No. (iii) we have to find out whether the formalities as required under Rule 173L is complied with and as per point No. (iv) we have to find out whether Rules 173H and 173L are indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process in the factory and after those processes the goods can be cleared from the factory without payment of duty. 22. In this connection, it is necessary for us to quote the relevant portion of Rule 173L which reads as follows :- Rule 173L. Refund of duty on goods returned to factory. - (1) The Collector may grant refund of the duty-paid on manufactured excisable goods issued for home consumption from a factory, which are returned to the same or any other factory for being remade, refined, reconditioned or subjected to any other similar process in the factory: Provided that, - (i) such goods are returned to the factory within one year of the date of payment of duty or within such further period or periods not exceeding one year, in the aggregate, as the Collector may, on sufficient cause being shown, permit in any particular case; (ii) the assessee gives information of the re-entry of such consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry [to enable the proper officer to verify the particulars of such goods within forty-eight hours of receipt of the information.] (iii) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the manufactured excisable goods which are returned to the same factory for being re-made, refined, re-conditioned or subjected to any other similar process in the factory. 24. In this connection, it is to be noted that in terms of Rule 173H of the Central Excise Rules, 1944 the appellants can bring the goods for re-making, re-conditioning or repairing and if they so choose, the appellants can remove the goods from the factory after the above processes without payment of duty. But under Rule 173L of the said Rules, 1944 the appellants are entitled to claim refund on those goods which were returned to the factory for the purpose of re-making, refining or re-conditioning or any other similar processes. The choice is entirely that of the appellants, either to follow the procedure prescribed under Rule 173H or the procedure under Rule 173L of the Central Excise Rules, 1944. In the decision reported in 1985 (21) E.L.T. 133 in the case of Foods, Fats and Fertilisers v. Collector of C. Ex., Calcutta, the Tribunal held that after re-processing the goods it is not necessary that the goods must go back to the original consignee as it is not warranted by the wordings of Rule 173L of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Rules, which fact also is not disputed by the Department. The Inspector concerned also inspected the returned goods and upon such inspection and physical verification, he endorsed his signature on the declaration and on the relevant records and the copies of that declaration are also produced by the appellants on Annexure-C of this appeal. This shows that the Central Excise Inspector concerned also had inspected these goods and made his endorsements, and at that time, he did not dispute any of these facts that the goods were taken back by the appellants for the purpose of re-making, re-conditioning etc. 28. The learned Advocate, Shri Bagaria also relied on the decision of the case reported in 1986 (26) E.L.T. 353 (Tribunal) in Shriram Refrigeration Industries Ltd. v. Collector of Central Excise, Hyderabad, wherein the Tribunal had discussed the meaning of re-making and re-conditioning. At para-6 the Tribunal held as follows :- 6. This brings us to the question as to what is repair and what is manufacture and where exactly the line is to be drawn between the two. The Central Excise Act and the Rules do not define repair/re-conditioning/remaking. These words have, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter return of the said goods, they had captively consumed the same for manufacture of other dutiable goods namely metanilic acid powder falling within the same Tariff Item and the said goods have been duly cleared under regular gate pass after payment of requisite duty. The appellants have however not produced any evidence to the subsequent clearance under Gate Pass and payment of requisite duty. The plea to that effect has already been raised before both the authorities. However, the fact remains that out of the duty paid goods initially cleared, part of the same has been returned to the factory and appropriate declaration has been made and duly verified by the departmental authorities. Besides Rule 173H of the Rules, there are certain relevant provisions in the nature of Rule 173L which would entitle the appellants to claim refund of duty already paid. Further the fundamental issue that an article need not suffer double duty and if any item has suffered double duty, the party paying duty is entitled to get refund, has also not been considered by the authorities below. They have restricted the findings only with regard to the provisions of Rule 173H. It appears that the authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Annexure-E to the Appeal Petition. This fact was again reiterated by the appellants in their letter dated 14th December, 1983, which was addressed to the Superintendent of Central Excise, concerned. Therefore, it is clear that the detailed account of the accounts book and the processes to which they were subjected to, were maintained by the appellants, and they were clearly made known to the Department through the letter dated 14-12-1983. But it was contended on behalf of the Department by the learned JDR, Shri Chowdhury that Form No. V was not maintained by the appellants in this regard. In answer to that contention, the learned Counsel, Shri Bagaria had produced the Form No. V along with the letter addressed to the Assistant Collector by the appellants, which was dated 6-3-1984. He had also produced a letter written by the Superintendent concerned dated 27-2-1984 requiring the appellants to produce Form No. V. In that letter dated 27-2-1984, the Superintendent had requested the appellants to furnish a copy of Form No. V showing a detailed account of the goods received and the process to which they were subjected. The xerox copy of Form No. V is also produced by the learned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted itself before him like this. It was the surest way to nail the lie if it was lie or to prove the truth if it was the truth. The total inactivity could only mean disinterest in hearing the truth and this ruins the case." It is thus clear that the Department had not disputed that the appellants had not undertaken the processes mentioned by them in their letter dated 14-12-1984. However, in substance, the appellants had complied with the requirement of intimating the Department about the processes undertaken by them. Form No. V does not contain any column wherein such process had to be mentioned by the appellants. The very fact that the Department had written the letter dated 27-2-1984 to the appellants requiring them to submit a copy of Form No. V in connection with the refund Application under Rule 173L of the Central Excise Rules, 1944, clearly goes to show that the Department had admitted the claim of the appellants as a refund under Rule 173L of the Central Excise Rules, 1944. Even assuming that there was some lapse in not mentioning the processes undertaken in Form No. V, still there is a substantial compliance with the Rules. In this connection, Shri Bagaria further reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are any number of decisions of the Tribunal on this aspect; one such decision is 1987 (29) E.L.T. 275 [Swidram Fasteners Ltd. v. CCE Madurai}. In the result, the appeal is dismissed and the consequential refund be given to the respondent company." This decision goes to show that the procedural lapse should not come in the way of the benefit due to an assessee. But in this case, the appellants had complied with the requirement in regard to submission of Form No. V in the prescribed manner. Even assuming that there was some procedural lapse, that will not come in the way of the grant of refund in favour of the appellants. 31. In that view of the matter, we find that the appellants have complied with the provisions of Rule 173L of the Central Excise Rules, 1944 and the case of the appellants is clearly covered by the above-said Rule. Accordingly, the denial of refund by the Collector of Central Excise (Appeals) is not correct. The impugned order is accordingly set aside and the order of the learned Assistant Collector of Central Excise, Rishra Division, in Order No. nil dated 15-2-1985 is hereby restored. The appeal is accordingly allowed. Date : 17-3-1992. Sd/-17-3-1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no condition that there should be manufacture or re-manufacture at all. The situations covered by Rule 173H and 173L are overlapping and it will be open to the manufacturers to claim either of these benefits subject to the fulfillment of the conditions provided in the respective provisions. While the subsequently introduced proviso (proviso-iv) that the amount of refund shall in no case be in excess of the duty payable on such goods after being re-made, refined, re-conditioned or subjected to any other process in the factory may make the manufacturers hesitant to opt for Rule 173L but opt for the alternative procedure of Rule 173H, and deny them the benefit of refund of the larger amount of duty paid originally and payment of the reduced amount of duty on the clearance of the reconditioned goods, such a restriction was not there at the material time and the refund cannot be denied. The appeal is allowed with consequential benefits to the appellants. In fact, during the arguments in the appeal, the learned Counsel for the appellants mentioned that they had neither received the refund of the duty paid by them originally nor the refund limited to the amount paid by them subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X
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