2004 (10) TMI 404 - AT - Central Excise

Appellate Tribunal rules for Appellant, setting aside duty demand and penalties under Central Excise Rules

The Appellate Tribunal CESTAT, Bangalore ruled in favor of the Appellant, represented by Shri V.J. Sankaran, Advocate, setting aside the duty demand, ... Intimation requirement under Rule 173H for re-entry of duty-paid goods for remaking/refining/reconditioning - application of Rule 173H where duty-paid materials are returned to the factory - penalty under Section 11AC for failure to follow prescribed procedureIntimation requirement under Rule 173H for re-entry of duty-paid goods for remaking/refining/reconditioning - application of Rule 173H where duty-paid materials are returned to the factory - penalty under Section 11AC for failure to follow prescribed procedure - Whether the provisions of Rule 173H were attracted and justified confirmation of duty demand and imposition of penalties for failure to follow the intimation procedure - HELD THAT: - The Tribunal accepted the appellants' uncontested factual position that the duty-paid materials returned to them were received at their registered office and were thereafter despatched to other parties, and were not returned to the factory. On that basis the Tribunal held that the mandatory intimation requirement envisaged by Rule 173H (which applies where goods re-enter the factory for being remade, refined, reconditioned etc.) was not attracted. Since the statutory procedure under Rule 173H did not apply, the confirmation of the duty demand and the penalties imposed for non-compliance with that procedure could not be sustained. The Tribunal therefore set aside the impugned order and allowed the appeal. [Paras 3, 4]Impugned demand and penalties confirmed for breach of Rule 173H set aside; appeal allowed.Final Conclusion: The Tribunal held that Rule 173H did not apply because the duty-paid goods were not returned to the factory but to the registered office and then despatched elsewhere; accordingly the duty demand and penalties confirmed for non-compliance with Rule 173H/Section 11AC were set aside and the appeal was allowed. The Appellate Tribunal CESTAT, Bangalore ruled in favor of the Appellant, represented by Shri V.J. Sankaran, Advocate, against a duty demand of Rs. 4,71,751/-, interest, and penalties imposed for failure to follow procedure under Rule 173H of the Central Excise Rules. The Tribunal found that Rule 173H was not applicable as the duty paid materials were not returned to the factory, leading to the impugned order being set aside and the appeal being allowed.