AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1984 (8) TMI 315
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....id on goods removed from the factory but returned afterwards for remaking, refining, reconditioning and such other similar process. Accordingly, the learned Asstt. Collector had issued a show cause notice to the respondent and in reply to the same the respondent submitted that the goods were defective, unusable and unfit for marketing any longer and they wanted destruction of the same. The Asstt. Collector had rejected the claim of the respondent. Being aggrieved from the aforesaid order the respondent had filed an appeal before the Collector (Appeals), Central Excise, Calcutta. Before the Collector (Appeals) the respondent bad contended that the goods were defective and were returned by the customer and were received by them at their factory and since these goods could not be re-processed the same were to be treated as waste and the refund submitted by them in respect of duty paid on such rejected pins should be allowed. The Learned Collector (Appeals) had held the defective articles which cannot be sold in the market, are not goods and as such no excise duty can be levied on such goods. Accordingly, he had allowed the appeal and set aside the order of the Asstt. Collector. Being ....
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.... Court judgment the order passed by the learned Collector (Appeals) should be quashed and the order passed by the learned. Asstt. Collector should be restored. Shri Bhowmik has also referred to Rule 196 in Chapter X of the Central Excise Rules, 1944 which deals as to the duty leviable on excisable goods not duly accounted for. 3. In reply, Shri N. Mookherjee, Advocate, has pleaded that the respondent had duly filed form D-3. He has pleaded that the respondent's refund claim under Rule 173-L ibid is in order and the respondent duly satisfies the conditions laid down in Rule 173-L. He has further pleaded that Rule 173-L deals with the refund of duty on goods returned to the factory and Rule 174-M deals with the goods cleared for export may be allowed to be returned to the factory. He has also submitted that Rules 97, 173-L and 173-H are the relevant Rules which deal with the refund on account of excise duty paid. He has pleaded that in the instant case Rule 137-L is applicable and Rule 149 deals with the destruction of unusable material, waste and other refuse. Shri Mookherjee has also pleaded that the goods were received back within one year from the date of clearance. He ha....
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....actory. The destruction of goods is not covered by any of the circumstances mentioned above. Rule 173-L is reproduced as under : - "Rule 173L (1) The Collector may grant refund of the duty paid on manufactured excisable goods issued for home consumption from a factory, which are returned to the same or any other factory for being re-made, refined, reconditioned or subjected to any other similar process in the factory : Provided that - (i) such goods are returned to the factory within one year of the date of payment of duty or within such further period or periodes not exceeding one year in the aggregate, as the Collector may, on sufficient cause being shown, permit in any particular case; (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 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 f....
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....rs reported in 1978 E.L.T. (J 180). The Hon'ble High Court had come to the counclusion after taking into consideration the judgment of the Federal Court and the Supreme Court which have been discussed above. Accordingly, 1 hold that the findings of the Collector (Appeals) that defective articles which cannot be sold in the market are not goods and the excise duty can be levied only on goods are not correct in law. Accordingly, the same are quashed. I hold that excise duty is a tax on manufacture of excisable goods. The taxable event is the manufacture or production of goods. It is not necessary to attract duty that the goods should be sold. If excisable goods are produced or manufactured that is sufficient to attract duty. Whether the goods are consumed, sold or not used thereafter is wholly irrelevant. I had the occasion to decide a similar issue in Appeal No. ED (CAD-54/83, Order No. 63/CAL/84-661 in the case of Collector of Central Excise, Calcutta v. Hind Tin Industries, Calcutta. In the said appeal I had held that the destruction of goods is not covered under Rule 173-L and there is no other corresponding provisions under the Central Excises and Salt Act, 1944 and the Central ....