TaxTMI 
TaxTMI 
2013 (11) TMI 629
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.... on defective goods returned to the manufacturer of the final product can be treated as an input for the purpose of Rule 57A of the Central Excise Rules, 1944?" 3. The brief facts of the case are that the assessee is the manufacturer of the refractory bricks. Assessee after paying the excise duty sold the refractory bricks. Some of the defective bricks have been returned by the purchaser to the assessee. The assessee used those defective refractory bricks to manufacture new refractory bricks. The assessee was subjected to levy of excise duty on the bricks which has been manufactured from defective refractory bricks. The assessee claimed MODVAT credit on the defective refractory bricks by claiming it to be input for the manufacture o....
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.... the new refractory bricks have been manufactured and since it involves the process of manufacturing, therefore, revenue has levied the excise duty upon the final product otherwise the excise duty itself could have not been levied upon the new product. Therefore, the question whether defective refractory bricks have been undergone to the process of manufacturing, cannot be questioned by the revenue. 6. We considered the submissions of the learned counsel for the parties and perused the facts as well as the rules referred above. 7. The Rule 173H is as under : "Retention in, or bringing into, a factory or warehouse, of duty paid goods. - (1) Except as hereinafter provided, no excisable goods or parts thereof on which duty h....
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....es information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Collector may, on sufficient cause being shown, permit in any particular case to enable the proper officer to verify the particulars of such goods within forty-eight hours of receipt of the information; (iii) the assessee stores the said goods separately pending their being remade, refined, reconditioned or subjected to any other similar process in the factory unless otherwise permitted by the Collector by an order in writing and makes such goods available for inspection by the prope....
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....otification issued under rule 8 or Section 5A of the Act; (ii) if the amount of refund payable on the goods is less than rupees fifty; (iii) on goods which are disposed of in any manner other than for production of goods of the same class; (iv) on the unmanufactured tobacco from which cigars, cheroots and cigarettes so returned to the factory have been produced; (v) if the value of the goods at the time of their return to the factory is, in the opinion of the Collector, less than the amount of duty originally paid upon them at the time of their clearance from the factory. (4) The Principal Collector may, for reasons to be recorded in writing, relax t....
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.... in its factory the goods upon which he has already paid the excise duty, then how these goods may be used is required to be seen according to the fact of the case, and in this case that, whether the defective refractory bricks were used as input for manufacturing new refractory bricks? There is no restriction of bringing in the defective material in the factory on which the assessee has paid the excise duty at the time of removing those goods horn the factory. Once they have brought in the factory and if anybody wants to take benefit of refund of the duty because of the defects in the goods etc., then in that situation in stipulated period one can apply for the refund of the excise duty as provided by Rules 173H and 173L. Neither the Rules....