ORDER
P.G. Chacko, Member (J)
1. The appellants are manufacturers of Aluminium Alloy ingots (Heading 76.01 of the CETA Schedule). They had cleared 5000 Kgs. of ingots under invoice No. 161, dated 29-9-2000 to M/s. Kerala Automobiles Ltd., Trivandrum on payment of duty of Rs. 62,800/-. Out of this quantity of ingots, 4905 Kgs. of ingots were found not conforming to the specifications of the buyer and hence returned to the manufacturer, which was accompanied by reversal of Cenvat credit at the buyer’s end. Upon receipt of these ingots, the appellants re-tested the goods for correct chemical composition and found that the silicon content was only 10.5%, which was insufficient for the buyer. These goods were subsequently cleared, on payment of duty, to another customer, for whom aluminium alloy ingots with silicon content in range of 9.5% to 12.5% were useful. Subsequently, the appellants filed a claim for refund of the duty paid by them on the ingots at the time of original clearance. The original authority and the first appellate authority have not allowed this claim, as they found that the goods returned by the first buyer had not been subjected to any of the processes prescribed under Sub-rule (1) of Rule 173L. The present appeal is against rejection of the refund claim.
2. Ld. Counsel for the appellants submits that re-testing of the ingots returned by the first buyer was one of the processes prescribed under Rule 173L (1). It is argued that the expression “any other similar process” occurring in Sub-rule (1) of Rule 173L encompasses the activity of re-testing also. Ld. Counsel has relied on the following decisions in support of the above argument :-
(1) Taylor Instrument Co. (I) Ltd, v. CCE, New Delhi, 1995 (77) E.L.T. 149 (Tribunal)
(2) M.V. Enterprises v. CCE, Bangalore, 1996 (83) E.L.T. 529 (Tribunal)
(3) Geep Industrial Syndicate Ltd. v. CCE, Allahabad, 1996 (88) E.L.T. 753 (Tribunal)
(4) CCE, Ludhiana v. Nav Bharat Engg,.
3. Ld. SDR reiterates the view taken in the impugned order.
4. After giving careful consideration to the submissions, I find that the ingots were originally cleared as “ALSI-31”. After re-testing, they were cleared as “ADC-12”. It is an admitted fact that the chemical composition of the goods did not change during the course of re-testing. To designate the ingots as “ALSI-31” for original clearance was, obviously, a mistake on the part of the manufacturer. Had this mistake not been there, the ingots would originally have been cleared as “ADC-12” only. The only advantage of re-testing was that the manufacturer could realise their mistake and correctly designate the goods as “ADC-12”. Thus the ingots in question were “ADC-12” at all times in the manufacturer’s correct parlance. This would mean that, in the hands of the appellants, these goods did not undergo any remaking, refining, reconditioning or any other similar process prescribed under Sub-rule (1) of Rule 173L. The expression “any other similar process” should be read ejusdem generis with the pre-existing expressions viz. remaking, refining etc. in the rule. Mere re-testing of the goods, not accompanied by any change of chemical composition or any other change is not comparable to processes such as remaking, refining etc. which involve physical, chemical or other changes. Hence I am unable to accept Id. Counsel’s plea that re-testing of the ingots was covered by the expression “any other similar process” used in Sub-rule (1) of Rule 173L. In this connection, he has relied on certain decisions of the Tribunal. In some of these cases, it was found that the defective goods returned by the assessee’s buyer were subjected to one or the other processes prescribed under Rule 173L. In none of these cases, mere testing of the returned goods was involved. In the case of M.V. Enterprises (supra), this Bench held to the effect that Rule 173L contained only procedural provisions. With great respect, I do not agree. Sub-rule (1) of Rule 173L specifically prescribed certain processes to which the defective goods returned by buyer should be subjected to. This provision also enabled the Commissioner to allow to the manufacturer refund of the duty paid at the time of original clearance of goods subject to fulfilment of the conditions stipulated under the rule. Sub-rule (3) of Rule 173L places an embargo on grant of such claim where the goods had not been subjected to any of the prescribed processes. The requirement that the goods should be subjected to one or more processes prescribed under Sub-rule (1) was a substantive requirement rather than procedural. On going through the format of the refund claim in question, I find that this was a claim filed under Rule 173L only. When the refund is claimed under a specific provision of law, the claimant should fulfil at least substantive conditions prescribed thereunder. I have already noted that the requirement of the goods having to be subjected to any of the prescribed processes is substantive. This condition, admittedly, was not fulfilled in the instant case.
5. For the reasons noted above, the appeal is dismissed.
(Dictated and pronounced in open court)