TALBROS AUTOMOTIVE COMPONENTS Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) The appellant is a manufacturer of cylinder head gaskets. They cleared 4800 cylinder heads to M/s. Tata Engineering and Loco Ltd., (TELCO), Pune under 12 invoices dated 29 -9 -2000 to 18 -10 -2000. The buyer rejected the goods. Therefore, they were brought back to the factory and D -3 declaration was filed on 23 -1 -2001. That declaration refers to Rule 173L. The receipt of the consignment was also verified by the Central Excise Officer. Subsequently, the appellant sought refund of duty of Rs. 97,968/ - originally paid, in respect of those goods under Rule 173L. A show -cause notice was issued by the Central Excise alleging that refund under Rule 173L is permissible only in respect of the goods brought back to the factory for being remade, refined, reconditioned or to be subjected to any such process in the factory. They were also asked to furnish details about the processes carried out. The appellant replied to the Show -cause Notice saying that the goods were subjected to the processes of unpacking, inspection, straightening, cleaning etc. After these processes the goods were removed for captive consumption. At this stage, the Central Excise duty of Rs. 97,974/ - was paid again i.e. Rs. 6/ - more than the original duty paid which was being claimed as refund.

(2.) The impugned order rejected the refund application on the ground that the appellant's case did not come within Rule 173L. Learned Commissioner (Appeals) has also noted that goods for captive consumption were eligible for exemption under Notification.

(3.) The contention of the appellant is that they were claiming under Rule 1731, from the beginning, and the officers had verified the return of the goods also. During the hearing, learned Consultant for the appellant pointed out that the goods had originally been packed in packages specifically made for the original buyer (TELCO). During transport and storage packing got damaged. Also the goods could not be sold to other buyers in the packing for TELCO. Therefore, goods were required to be repacked, alter earning out further processes, if any required. Learned Consultant has submitted that it is settled (R.M.I. Foods Limited v. C.C.E., Meerut [2002 (143) E.L.T. 360 (Tri - Del.)] that repacking is also covered by the term 're -made' in terms of Rule 173L (1) of the Central Excise Rules, 1944. The appellant has contended that other processes - straightening, cleaning etc. - also had been undertaken. Learned Consultant emphasized that in any event, demand of duty twice on the same goods is not permissible. He has also submitted that the exemption in favour of captively consumed goods is no ground for denying refund claim inasmuch as it is settled that it is for the assessee either to avail exemption or to pay duty in respect of the captively consumed goods.