TaxTMI 
TaxTMI 
2014 (5) TMI 173
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.... concentrates and declared on payment of duty again, the requirement of Rule 173L were fully satisfied and consequently rejection of refund claim was absolutely arbitrary, void and unjustified? (ii) Whether the conditions prescribed under Rules 173L(2) and 173L(3) are mandatory?" 3. The facts in brief may be noticed that the appellant cleared concentrates for its Visakhapatnam Smelter Plant, however, the dispatched goods did not meet the technical requirement and the material was, therefore, recalled; since the same were rejected goods, the appellant took Modvat credit treating it as inputs, however, the said Modvat credit was reversed amounting to Rs. 10,87,587/- upon being asked to do so; the appellant then filed claim for refund under Rule 173L of the Central Excise Rules, 1944 ('the Rules'); the refund claim was rejected by order dated 24-1-2001 by the Assistant Commissioner. The Commissioner (Appeals-II) rejected the appeal by its order-in-appeal dated 9-12-2003 filed by the appellant. The CESTAT also rejected the appeal preferred by the appellant vide its order dated 21-3-2005. 4. It was submitted by learned counsel for the appellant that all the three authoritie....
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....led Modvat declaration prior to the receipt of the goods and took Modvat on the goods so returned. I further notice, in the above connection that even though Modvat credit was ultimately disallowed to them, it was never the case to the department that the impugned goods were not received in the factory of the appellants. However, I observe that there were other mandatory conditions which the appellants were required to follow before refund could be paid, which admittedly were not fulfilled by them. Their contention that Rule 173L(4) give authority to the Commissioner, to relax any of the provisions of this Rule, does not help them, especially in the context of their plea that the nature of goods in their case was such that it was not possible for them to comply with the statutory requirement. Since they knew it ab intio, they should have sought relaxation at the time of receipt of the duty paid goods in their factory itself. Supposing that they could not do so, as they had staked claim for Modvat credit, they should have made such a request when they filed refund claim under Rule 173L to enable learned Commissioner, to have caused necessary verifications or to have prescribed a pra....
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....; (ii) the assessee gives 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 Commissioner 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 Commissioner by an order in writing and makes such goods available for inspection by the proper officer when so required; (iv) the amount of refund payable shall in no case be in excess of the duty payable on such goods after being re-made, refined re-conditioned or subjected to any other similar process in the factory : Provided further that in relation to the declared excisable goods, for clause (ii) of the first proviso, the following clause shall be substit....
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....cent export-oriented undertaking and returned to another factory in any place in India." 12. From the orders passed by the Commissioner (Appeals-II) and CESTAT, it is abundantly clear that despite being aware of the requirements of Rule 173L of the Rules for the purpose of claiming refund, first the appellant claimed Modvat credit, then reversed the same and is claiming the declaration submitted for claiming Modvat credit to be sufficient compliance of provisions of Rule 173L. Further, the basic requirement of submitting Form D-3 was never complied with by the appellant and, as such, in fact the process of seeking of refund under Rule 173L was not even properly initiated by the appellant, as such, having failed to satisfy the conditions of Rule 173L, the appellant's refund claim was rightly rejected. 13. Coming to the exercise of power of relaxation under Rule 173L(4) of the Rules, we are of the considered opinion that for invoking power of relaxation under the said sub-rule, the appellant was required to comply with the requirements of the Rules and satisfy the Commissioner in this regard, which relaxation was in fact never applied by the appellant and, on the other ha....