ORDER
P.K. Desai, Member (J)
1. This appeal is directed against the order-in-appeal bearing No. SKM-469/PN-132/87 dated 25.6.1987 confirming the order in original bearing No. V-(33DD) 18-577/82/3757 dated 16.6.1984, rejecting the appellants’ claim for returned of the amount.
2. The appellants who are the manufacturers of computers, despatched some units of computers under the Gale Passes on 27.9.1981, after payment of duty. These units were mil accepted by the customers and the same were brought back for repairing and overhauling on 30.4.1982 and 8.6.1982. It is reported that free replacements were given to them and excise duty was paid on these replacements and therefore, the appellants filed the claim for refund of duty paid on initial consignments which were brought back claiming refund under Rule 173L of the Central Excise Rules 1944. The claim was rejected by the Asstt. Collector holding that the declarations as prescribed under Rule 173H were not produced and the claim was not tenable under Rule 173L. In the appeal preferred by the appellants, the Collector (Appeals) held that during the personal hearing of the appeal, the appellants had submitted that the goods brought back under D-3 declarations were junk and they were prepared to destroy them any time under the provision of the Central Excise Officers and that is why he came to the conclusion that no refund was admissible when the conditions contained in 173L(3) were not observed and not fulfilled.
3. Shri Manmadhan for the appellants submitted that here is the case, where they have brought the goods under D-3 declaration and that they did undertake the process of re-processing and that they fell the goods were not capable of use, the same were treated as junk. In his submission, when the efforts were made for re-processing the goods, the provisions of Rule 173L were decreed to have been complied with. His main thrust of the argument was that when the goods were defective at the initial despatch, they could not be taken as the goods manufactured so as to come under the purview of Section 4 of the Central Excise Act and that therefore the duty initially paid itself was not leviable and that When the duty was paid under the mistake the same was required to be refunded. He submitted that Rule 49 of the Central Excise Rules also provides for the duly chargeable only on removal of the goods from the factory premises and that when the articles removed did not fall within the ambit of the ‘goods’ as understood under the Central Excises & Salt Act, the liability to pay duty did not arise and whatever they paid could not be considered as duty payment and they were eligible to get the refund.
4. Mrs. Lipika M. Roy Choudhary, the ld. SDR for the respondents submitted that the appellants have put forward their claim for refund on return of the goods under D-3 declaration and has specifically invoked the provisions of Rule 173H in the application. In her submission, the articles that were despatched, were duly manufactured goods which turned out to be defective. Mere detection of the defect could not make the article as not falling under the ambit of Section 4 of the Act and therefore, there was no justifiable ground available to the appellants to argue that the amount paid at the initial stage was not duly and as such the provisions of Rule 173H and 173L could not stand. She then submitted that the claim preferred by the appellants is under the provisions of Rule 173H; the appeal has to be considered within the parameters of the same Rule and admittedly the goods which are received back are not reconditioned and are not to be marketed at all but have to be thrown as junk and thus the requirement of the Rule cannot be said to have been complied with and the appellants are not entitled to claim the refund on that ground.
5. I have considered the submissions made and also referred to the Rules 173H & 173L. The essence of this Rule is that the goods received back ought to go back to the market and not to remain within the factory premises. Obviously, the said requirement does not appear to IMVC been complied with nor is it likely to be complied with as the appellants themselves have admitted that the goods are junk and it is not possible for them to put into the market after reconditioning or re-processing. In the circumstances, I hold that the view taken by the Collector (Appeals) is just and proper.
6. As regards the arguments advanced on behalf of the appellants that the goods when initially sent out were not the goods but the articles falling outside the word ‘goods’ as contemplated under Section 4 of the Act and as such the duty paid wax under the mistaken belief and on that ground the refund ought to be ordered, even if it is to be considered for the sake of argument, then also the provisions of Section 11B could be attracted and the demand of duty ought to be made within the period of six months from the date of payment. Here is not to the case, where there is a mis-calculation as to the rate of duty so as to avail the benefit of filing of the RT-12 return and as such the argument advanced by the ld. sr. executive that because of the RT 12 returns were not finalised cannot hold as goods. In any case, the claim initially lodged being one under Rule 173H, the fresh ground now urged cannot be entertained, and even if it is entertained the decision could not be in favour of the appellants, as going by that, the claim would be barred by limitation prescribed under Section 11B of the Central Excise Rules. In the circumstances, there appears to be no merit in the appeal preferred by the appellants and the same is dismissed.
(pronounced in the open court)