THIRUMALAI CHEMICALS Vs. CCE

JUDGEMENT

(1.) This is an appeal filed by the appellant assessee against the decision of the Commissioner of Central Excise (Appeals), Chennai dated 23.8.2000. In the appeal, Ld. Commissioner (Appeals) have rejected the contention raised by the assessee that they were entitled for refund in terms of provisions of Rule 173L of the CE Rules.

(2.) The assessee is a manufacturer of goods falling under sub -heading 2917.90 of the schedule to the Central Excise Tariff Act. The product Phthallic Anhydride was cleared by the appellant on payment of appropriate duty. The purchaser M/s. Berger Paints (I) Ltd. rejected the material and sent back the same to the appellant factory. After it is received, the evidence disclosed in the case is that they were re -packing the same and sold it to the same purchaser. The question involved is whether under circumstances the repacked material should suffer duty or not.

(3.) In the show cause notice it is stated inter alia in paragraphs 2 and 3 which states: The details of the grounds of the refund claim cited above are as follows: The claimant have despatched two consignments, 10,000 MT each of Phthallic Anhydride under invoices bearing SI. No. IP 1307 and IP 1308 both dated 20.1.98 after debitting Rs. 49,500 each in their RG23A Part II register. However, the goods were rejected by their buyer M/s. Berger Paints (I) Ltd. Calcutta and hence the goods were brought back into the factory under Rule 173L. On payment of duty of Rs. 49,500 on each consignment, the claimant have cleared the returned goods. Total duty Rs. 99,000 (49,500 + 49,500) originally paid on the said goods has been claimed as refund. However, it appears that the returned goods were cleared as such to their buyer without being subjected to any process. As per the provisions under Rule 173L, a refund of excise duty shall be granted only for the goods returned to the same factory or any other factory for being re -made, refined, reconditioned or subjected to any other process which amounts to manufacture of goods of same class.