- (1.) Heard learned counsel for the parties. The questions raised by the appellant in this appeal is as under: Whether in view of the specific provisions under rule 173H and rule 173L of the Central Excise Rules, 1944, remaking, refining, reconditioning, repairing or similar processes on defective goods returned to the manufacturer of the final product can be treated as an input for the purpose of Rule 57A of the Central Excise Rules, 1944?
(2.) The brief facts of the case are that the assessee is the manufacturer of the refractory bricks. Assessee after paying the excise duty sold the refractory bricks. Some of the defective bricks have been returned by the purchaser to the assessee. The assessee used those defective refractory bricks to manufacture new refractory bricks. The assessee was subjected to levy of excise duty on the bricks which has been manufactured from defective refractory bricks. The assessee claimed MODVAT credit on the defective refractory bricks by claiming it to be input for the manufacture of the refractory bricks. The Tribunal in view of the various earlier decisions of the Tribunal, given in the case of CCE, Merrut Vs. Bhushan Steel & Strips Ltd.,2000 39 RLT 200 (CEGAT-LB) and another larger Bench decision in the case of Hindalco Industries Ltd. Vs. CCE, Allahabad,2000 38 RLT 986 (CEGAT-LB) held that the assessee is entitled to MODVAT credit. The Tribunal in its impugned order dated 01.10.2003 also held, that brick manufactured from defective refractory bricks are new product as it has to undergo a process and thereafter new refractory bricks are manufactured and therefore, the revenue has levied the excise duty upon such final product which are said as the refractory bricks.
(3.) The contention of the learned counsel for the appellant is that there is specific provision in Rule 173H of the Central Excise Rules, 1944 (in short the 'Rules') with respect to again bringing in the factory the, product which has been sold by the factory after paying the excise duty and if, the said product is found defective by the factory purchaser, then in that situation the said factory is entitled to refund of the excise duty paid as per Rule 173L of the Rules.;