2002 (3) TMI 383

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....e pouches of Horlicks are cleared on payment of duty. During the period from July, 1998 to September, 1998, they cleared 14,850 dozens of Horlicks packed in such pouches involving a duty of Rs. 16,23,564/- to their Madras depot. The packing of these goods were found sub-standard/damaged therefore, the same were returned to the factory. The goods were repacked and cleared on payment of duty again. The party claimed refund of the aforesaid amount of duty under Rule 173L of the Central Excise Rules, 1944. They were, however, issued a show cause notice, dated 9-6-1999 by the Assistant Commissioner, Division-IV, Noida which averred that the process undertaken on the returned goods restricted only to the extent of exchanging packing material; tha....

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....for the respondents. The facts of the case are made explicit in the preceding paragraphs of this order. The refund claim of the appellants is rejected on the ground that in terms of Rule 173L(1) the refund of duty paid on the excisable goods is admissible if such goods are brought in the factory for being re-made, refined, reconditioned or subjected to any other similar process. It is stated that repacking of the processed material is not one of the processes specified in this rule and therefore the refund is not admissible. Another ground on which the claim of refund is denied is that under sub-rule (3)(v) of Rule 173L, no refund would be admissible in respect of the duty paid, if value of the goods at the time of their return to the facto....

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....anufacture. The ld. Counsel for the appellants is relying on the following decisions in support of his contention:- (1) CCE v. Kothari Products Ltd. - 2000 (121) E.L.T. 800 (T) (2) CCE, Kanpur v. Kothari Products (P) Ltd. - 2000 (116) E.L.T. 497 (T) (3) CCE, Kanpur v. Kothari Products - 2001 (127) E.L.T. 378 (T) 4. We have considered the submissions made before us. In the present case the duty paid goods are brought back to the factory of manufacture for repacking since the laminated pouches in which the product was packed were found to be sub-standard/damaged. They were repacked in fresh pouches and cleared on payment of duty again. In our view the activity undertaken by the appellants is squarely covered un....