Refund on scrap duty requires reconsideration under the revised departmental circular and revenue safeguards.

Refund of duty paid on scrap arising from packing material used with modvatable inputs had to be reconsidered in light of Rule 57F(1)(d) and the revised Board circular dated 19-7-1999. Earlier circulars and CEGAT decisions had been relied on below, but the later circular withdrew the earlier clarification and introduced safeguards for revenue interest. Because the lower appellate authority had not examined the refund claim under the latest departmental instruction, the matter was remitted for fresh consideration by the Commissioner (Appeals) under the revised circular.

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Issues: Whether the refund claim on duty paid on scrap of packing material of modvatable inputs was admissible in view of Rule 57F(1)(d) of the Central Excise Rules, 1944 and the Board's revised circular dated 19-7-1999.

Analysis: The dispute turned on the treatment of waste arising from packing material used for modvatable inputs and the effect of successive Board circulars on the departmental stand. The earlier circulars and the CEGAT decisions relied upon by the appellant had been followed by the lower appellate authority, but the later circular dated 19-7-1999 withdrew the earlier clarification and directed safeguards for revenue interest. As the lower appellate authority had not examined the refund claim in the light of the latest circular, reconsideration was necessary.

Conclusion: The matter required fresh examination by the Commissioner (Appeals) in the light of the revised circular dated 19-7-1999.

Final Conclusion: The revenue appeal succeeded only to the extent that the impugned order was set aside and the refund issue was remitted for reconsideration under the latest departmental instructions.

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