1994 (1) TMI 177 - AT - Central Excise

Refund eligibility for reprocessed goods clarified by Appellate Tribunal under Rule 173L

The Appellate Tribunal held that rejected goods cleared after re-processing are eligible for a refund under Rule 173L of the Central Excise Rules, even if ... Refund when duty paid goods returned for re-processing, repair or re-conditioning Issues:- Whether rejected goods cleared again after re-processing are eligible for refund under Rule 173L of the Central Excise Rules.Detailed Analysis:1. Background and Appeals: The appeals before the Appellate Tribunal CEGAT, Bombay were against orders passed by the Collector of Central Excise (A), Ahmedabad. The appeals involved various appeal numbers with different orders in appeal and dates. The common issue in all appeals was whether rejected goods cleared after re-processing are eligible for a refund under Rule 173L of the Central Excise Rules. The appellants in one appeal were M/s. Anil Starch Products Ltd., while the rest of the appeals were by the Revenue.2. Facts and Arguments: M/s. Anil Starch Products Ltd. were engaged in manufacturing products like sorbitol, glucose, and dextrose. Some consignments were found defective and returned by customers. The returned goods were reprocessed and cleared again on payment of duty. The issue arose when refund claims for the originally paid duty were rejected by the Asstt. Collector, citing lack of separate processing and account maintenance for the reprocessed goods. The Collector (Appeals) ruled against the assessee in one case but in favor of the assessee in other cases.3. Decision and Reasoning: The Tribunal found no reason to interfere with the Collector (Appeals) findings in favor of the assessee, especially when facts were undisputed. The Tribunal noted that in continuous processes like chemical manufacturing, it may not be feasible to reprocess returned goods separately. The requirement for separate reprocessing and accountal was not mandatory under Rule 173L. As the returned goods were reprocessed and cleared again on payment of duty, the Tribunal held that Rule 173L applied for granting a refund if other conditions were met. Consequently, the appeals from the Revenue were dismissed, and the appeal from the assessee was allowed with relief.This judgment clarifies the application of Rule 173L in cases where rejected goods are reprocessed and cleared again, emphasizing that separate reprocessing and accountal may not always be feasible, especially in continuous manufacturing processes.