Decided on December 26,1991



K.Sankararaman, - (1.) THE appeal filed by Collector of Central Excise, Calcutta-I is directed against the Order-in-Appeal dated 27-6-1988 passed by the Collector of Central Excise (Appeals), Calcutta, in terms of which he had allowed the appeal before him by M/s. Indian Chain (P) Ltd., who are the respondents herein, holding that the refund claim filed by them was within the time limit and that they were eligible for the refund of duty claimed by them. He has pointed out in his order that the appellants had, in their reply to the show-cause notice, referred to their claim dated 8-4-1986 which was received in the Assistant Collector's Office on 23-4-1986 and as the duty for the second time was paid in December, 1985, the refund claim was within the time limit. THE appeal has been allowed accordingly "subject to correctness of this fact".
(2.) The facts necessary for disposal of the present appeal are as follows :- The Respondents M/s. Indian Chain (P) Ltd. had cleared certain goods on payment of duty on 16-2-1984. These were returned to them by the consignees on 24-5-1984. The respondents cleared the goods after necessary processing to other customers in two lots on 17-12-1985 and 31-12-1985 on payment of duty once again. They filed the refund claim in April, 1986. The Assistant Collector held that the refund claim was hit by limitation as the refund related to Rule 173L and the goods were returned to them on 24-5-1984. The relevant date for deciding whether the refund claim had been filed in time was taken by the Assistant Collector to be the date of return of the goods to the factory in terms of Explanation B(b) to Section 11B of the Central Excises and Salt Act, 1944. On the above basis, the claim was rejected as hit by limitation. The Collector (Appeals), while deciding the appeal before him, however, held that the refund claim filed in April, 1986 was with reference to the duty paid a second time, and since this payment was made in December, 1985, the refund claim was not hit by limitation. It is against this decision, the present appeal has been filed by the Collector of Central Excise, Calcutta-I. Shri M.N. Biswas, learned Senior Departmental Representative appeared for the appellant Collector. He reiterated the submissions contained in the appeal. He submitted that the claim had been rightly rejected as time barred since they did not satisfy the conditions of Rule 173L which regulates the procedure for claiming refund in respect of duty paid goods returned to the factory for re-manufacture, reprocessing etc. He also stated that the goods claimed to be cleared as returned goods which have been reprocessed, have not been properly identified and linked to the originally duty paid goods.
(3.) SHRI S.K. Sinha, learned Counsel for the respondents opposed the grounds taken in the appeal and pleaded that the Order-in-Appeal may be sustained as it is based on the correct appreciation of the legal position and the facts of the case. He submitted that the refund claim was not under Rule 173L. The goods had been rejected by their first customers and were simply returned as they were not suitable for them. They were received back in the factory for being stored and resold to other customers. A D-3 intimation had been submitted within 24 hours of receipt of the returned goods. The goods were entered in the relevant register (Form V Register) maintained by them in accordance with the instructions which have been reproduced in Excise Law Times. Suitable remarks had been made by them in the clearance documents and in the RG-1 to estab-lish a link between the goods cleared in December 1985 on payment of duty once again with the returned goods. SHRI Sinha also pointed out that the Assistant Collector had not rejected the refund claim on the ground that the goods were not correlated with the returned goods. Since duty had been paid by them purely by mistake of law, this amount could be legally claimed by them as refund. Their refund claim was within a period of six months from the date of such duplicate payment of duty and hence it was not hit by time bar. He, therefore, pleaded that the department's appeal be dismissed and the Order-in-Appeal upheld.;

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