{"id":83801,"date":"1989-11-06T00:00:00","date_gmt":"1989-11-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/arkonam-castings-and-forgings-vs-collector-of-central-excise-on-6-november-1989-2"},"modified":"2015-12-10T09:41:00","modified_gmt":"2015-12-10T04:11:00","slug":"arkonam-castings-and-forgings-vs-collector-of-central-excise-on-6-november-1989-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/arkonam-castings-and-forgings-vs-collector-of-central-excise-on-6-november-1989-2","title":{"rendered":"Arkonam Castings And Forgings &#8230; vs Collector Of Central Excise on 6 November, 1989"},"content":{"rendered":"<div class=\"docsource_main\">Customs, Excise and Gold Tribunal &#8211; Tamil Nadu<\/div>\n<div class=\"doc_title\">Arkonam Castings And Forgings &#8230; vs Collector Of Central Excise on 6 November, 1989<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1990 (28) ECR 572 Tri Chennai<\/div>\n<div class=\"doc_bench\">Bench: V Gulati<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p>V.P. Gulati, Member<\/p>\n<p>1. This appeal is directed against the order of Collector of Central Excise (Appeals), Madras who rejected the refund claim of the appellants in terms of Rule 173L of Central Excise Rules. The brief facts are that the appellants received back from their customers two castings which were earlier cleared by them on payment of duty, as these castings were found defective. The appellants informed the authorities by their letters dated 20.1.1986 and 5.11.1986 that two castings had been received back by them being defective and the appellants sought permission of the authorities for remelting the same. The appellants&#8217; plea is that they manufactured fresh castings answering to the same description out of the scrap generated from the two castings received back and supplied the same as free replacement to their customers. The authorities accorded permission to the appellants to bring the castings and convert the same into waste and scrap and remove the same in accordance with the provisions contained under Rule 173L.\n<\/p>\n<p>2. The learned advocate for the appellants pleads that right from the beginning the appellants informed the authorities regarding the rejection of their castings by their customers and that they wanted to remake the castings of the same type as free replacement. Their letters of 20.1.1986 and 2.11.1986 would bear out the same, according to the learned Counsel. The learned Counsel therefore pleaded that since they fulfilled the conditions set out under Rule 173L their refund claim should be allowed. The learned Counsel drew our attention to the findings of the Collector (Appeals) in the impugned order. He pointed out that the Collector (Appeals) rejected the claim on a technical ground for not having made the entry regarding the castings having been made out of the scrap and despatch of the same.\n<\/p>\n<p>3. Shri KK. Bhatia, the learned SDR for the Department pleads that inasmuch as the goods lost their identity on re-making, the benefit of Rule 173L of the Central Excise Rules would not be available. He however, could not elaborate as to the scope of the term &#8216;remaking&#8217; as set out in Rule 173L.\n<\/p>\n<p>4. The learned Counsel for the appellants also cited the order of this Tribunal bearing Order No. 489\/87 dated 21.7.1987 wherein under the same circumstances, the appellants&#8217; refund was allowed in terms of Rule 173L.\n<\/p>\n<p>5. The findings of the Tribunal in the case cited above are reproduced below for convenience of reference:\n<\/p>\n<p>In this case, it is observed that the appellants had applied for permission to receive back the goods by their letter to the Assistant Collector dated 8.8.1985 in which they had sought permission for receiving the goods back stating that they have to re-make the castings by melting the castings for manufacture of the same as free replacement to the Customer and the Assistant Collector had accordingly given permission also to do so. It is also not in dispute that the goods after re-making would still answer to the description of castings and classifiable under the same item in the Central Excise Tariff Schedule. The goods after remaking were to be supplied as free replacement. In this connection<br \/>\n  Sub-rule (3) of Rule 173L is relevant which lays down that no refund shall be admissible in respect of the duty paid on goods which are disposed of in any manner other than for production of goods of the same class. This condition is admittedly satisfied and it is also not disputed that the other conditions regarding timely intimation, identification of the goods, examination and separate accounting of the goods have also been complied with and fulfilled by the appellants. In these circumstances having regard to the provisions of Rule 173L referred to above, so long as the rejected goods are re-made after melting into goods falling under the same tariff item, it has to be held that refund under Rule 173L is admissible.\n<\/p>\n<p>6. In the present case it is observed, that the appellants vide their letters referred to supra have made it known to the Department that they were breaking the castings and remelting the same and have pleaded that castings of the same size answering to the same description in all respects were made and supplied as free replacement to their customers. It is also observed that the appellants have made necessary entries in their register for receipt of these castings as required to be done by a small scale unit. What is required to be verified under Rule 173L is whether the castings which were brought into the factory on remaking resulted in the production of the new castings and were sent out as free replacement and that these new castings were of the same class answering the same description as the one&#8217;s returned. Verification of this aspect would not have posed any problem to the Department. The records bear out that the appellants have fulfilled all other conditions set out under Rule 173L. In this view of the matter, the impugned order appealed against is set aside and the matter remanded to the lower original authority for re-consideration of the issue in the light of the order of the Tribunal above after verification as to whether the new castings were made out of the defective ones brought into the factory and the castings after remaking answered to the description of castings returned and were classifiable under the same tariff item. The appeal is thus allowed by remand in the above terms.\n<\/p>\n<p>(Pronounced in the open Court).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customs, Excise and Gold Tribunal &#8211; Tamil Nadu Arkonam Castings And Forgings &#8230; vs Collector Of Central Excise on 6 November, 1989 Equivalent citations: 1990 (28) ECR 572 Tri Chennai Bench: V Gulati ORDER V.P. Gulati, Member 1. This appeal is directed against the order of Collector of Central Excise (Appeals), Madras who rejected the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-83801","post","type-post","status-publish","format-standard","hentry","category-judgements"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Arkonam Castings And Forgings ... vs Collector Of Central Excise on 6 November, 1989 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/arkonam-castings-and-forgings-vs-collector-of-central-excise-on-6-november-1989-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arkonam Castings And Forgings ... vs Collector Of Central Excise on 6 November, 1989 - Free Judgements of Supreme Court &amp; 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