HINDUSTAN ZINC LTD Vs. UOI

JUDGEMENT

(1.) This appeal under Section 35G of the Central Excise Act, 1944 ('the Act') has been filed against final order dated 21.3.2005 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (CESTAT), whereby, the appeal filed by the appellant against order in appeal dated 9.12.2003 passed by the Commissioner, Central Excise (Appeals-II), Jaipur ['Commissioner (Appeals-II)'] was dismissed. The appeal was admitted by this Court on 10.4.2007 on the following substantial questions of law:--

(2.) The facts in brief may be noticed that the appellant cleared concentrates for its Visakapatnam 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.

(3.) It was submitted by learned counsel for the appellant that all the three authorities below have committed grave error of law and fact in dismissing the appellant's claim for refund, inasmuch as, it is not in dispute that the concentrate was originally cleared on payment of duty; the same was received back in the factory premises; the -Department was duly apprised of the receipt of concentrate; in view of the nature of goods involved, which were mixed with the existing in process quantity, it was impossible either to process the said quantity of concentrate separately or to keep an account of the said quantity separately; and that while making clearance of concentrate again the duty payable thereon, was deposited and, therefore, it would be a case of double payment of duty and, consequently, the appellant was entitled to refund.