Tribunal Allows Refund Claims for Defective Goods Returned for Reprocessing
UNITED PHOSPHORUS LTD. Versus COLLECTOR OF C. EX.
UNITED PHOSPHORUS LTD. Versus COLLECTOR OF C. EX. - 1991 (56) E.L.T. 542 (Tribunal)
Issues:- Appeal against rejection of refund claim for defective goods returned for reprocessing and cleared again on payment of duty after re-processing.
Analysis:1. The appellants argued that the defective goods were returned, duly reprocessed within six months, and cleared on payment of duty as per Rule 173L of the Central Excise Rules. The Assistant Collector rejected the refund claim due to late rendering of the reprocessing account after six months. In one case, the Collector (Appeals) raised a different ground of missing gate passes, which was later found to be factually incorrect as the gate passes were traced. The appellants requested consideration of their claims on merits, supported by original records showing compliance with the rules.
2. The Respondent contended that discrepancies in gate pass numbers and the delay in rendering accounts for over six months justified the rejection of the refund claims. The non-compliance with Rule 173L provisions was emphasized by the Respondent.
3. The Tribunal focused on the interpretation of Rule 173L, specifically sub-rules (2) and (3). Sub-rule (2) mandates maintaining a detailed account of returned goods and processes. Sub-rule (3) requires completing processes and rendering accounts within six months of goods return. The Tribunal found the appellants had maintained proper accounts and completed reprocessing within the stipulated period. While the extract of the reprocessing register was not submitted with the refund claim, the Tribunal deemed substantial compliance with rules. Referring to Section 11B of the Central Excise Act, which deems the date of entry into the factory as relevant for refund claims, the Tribunal held that filing claims within six months of entry sufficed. Given compliance with substantial provisions and timely reprocessing, the Tribunal set aside the orders and remanded the case for reconsideration of refund claims on merits by the Assistant Collector in accordance with the law.
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