JCT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal is directed against a duty demand of about Rs. 3 lakhs and imposition of penalty of Rs. 50,000/ - on the appellant. Duty demand is in respect of duty paid goods which had been received back by the appellant and cleared after reprocessing. The appellant has claimed the benefit under Rule 173H of the Central Excise Rules. The same has been rejected on the ground that the goods were not received back under the cover of duty paying documents and that there was delay on the part of the appellant in applying for exemption from production of such document.

(2.) The contention of the appellant is that the goods had been returned by their original purchaser under the cover of challans. However, the purchasers did not return their copies of the invoices evidencing payment of duty. Therefore, the appellant filed D -3 declaration along with the appellant's copy of the invoice under which the goods were cleared upon payment of duty. On receipt of D -3 declaration, the officers raised no objection about non -filing of buyer's copy of duty paying invoice. Subsequently, when Show Cause Notice was issued, appellant applied for seeking exemption from production of those documents. The appellant also filed copy of invoices which had been referred by the buyer. The contention of the learned Counsel for the appellant is that in these circumstances, the identity of the goods returned by the buyers and the duty paid on them remain established and that there was no case for demanding duty on them on account of their being reprocessed in the factory.

(3.) I have perused the record and heard both sides. Rule 173H(2) specifics that an assessee may bring into his factory excisable goods accompanied by "duty paying documents", if such goods....are for remaking etc..... Rule [173H(2)(c)]. However that sub -rule contains the following proviso - "Provided that in the case of goods or parts thereof which are not accompanied by duty paying documents, if the Commissioner is satisfied that the identity of the goods can be established by other collateral evidence, he may by order and subject to such conditions as he may impose, relax the requirement of the production of duty paying documents". In the appellant's case, they have filed D -3 return promptly upon receipt back of the goods. No objection was raised about the absence of the duty paying documents nor is it the case that the goods cannot be identified. The appellant had filed his copy of the duty paying invoice. Subsequently, buyer's copy was also filed. Thus, there is no dispute about the identify of the goods. In these circumstances, demand of duty on the ground of delay in filing the duty paying documents has no substance. Scheme of the Rule is that an assessee can reprocess duty paid goods without having to pay duty once again. Since the receipt of the goods and their identity remain established by the D -3 return, the appellant's copy of the invoices and the subsequently filed buyer's copies, there is no justification in the present duty demand. Accordingly, the duty and penalty are set aside and the appeal is allowed.