ARKONAM CASTINGS AND FORGINGS LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(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' 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.

(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.

(3.) 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' refund was allowed in terms of Rule 173L.