1. The Collector of Central Excise, Calcutta has filed an appeal being aggrieved from Order No. 1106/Cal/83 dated 31-10-1983 passed by the Collector (Appeals), Central Excise, Calcutta.
2. Briefly the facts of the case are that the respondent, M/s. Hind Tin Industries, 107A, Raja Dinendra Street, Calcutta-6 had removed a consignment of 1878 pcs. of metal containers falling under T.I. 68 for home consumption on payment of appropriate duty under GP No. 867 dated 5-6-80. Subsequently, the respondent company had received back 1860 pcs. out of the despatched quantity of 1878 pcs. as shown in the gate pass on rejection by the buyers. The respondent company had intimated to the Revenue Authorities on Form No. D-3 i.e., Declaration of receipt of excisable goods on 6th April, 1981. The said goods were received back by the respondent on 4th April, 1981 at 17-00 hrs. viz. 5 pm.
Thereafter, the respondent had filed an application for refund vide its application dated 27th July, 1981. Along with the refund application the respondent had filed a covering letter dated 27th July, 1981. The learned Asstt. Collector had rejected the refund claim of the respondent on the ground that the respondent had not complied with the provision of Rule 173L(i)(ii) of Central Excise Rules, 1944. The Asstt.
Collector had also held that the consignment was in loose condition and could not be identified with the original consignment and the respondent's refund claim for Rs. 711.45 was rejected. Being aggrieved from the aforesaid order the respondent had filed an appeal before the Collector (Appeals). The same was accepted. Being aggrieved from the aforesaid order the Revenue has come in appeal before this Court.
3. Before the commencement of the proceeding I had asked Shri K.P.Bhattacherjee, the learned, consultant, who has appeared on behalf of the respondent, whether he intends to file any Cross Objection and if he so desires the adjournment can be granted. Shri Bhattacherjee has submitted that he does not intend to file any Cross Objection on behalf of the respondent and has given in writing to this effect. He has pleaded that the appeal may be heard.
4. Shri A.K. Saha, the learned Sr. D.R. has appeared on behalf of the appellant and has pleaded that it is a fit case for admission as the principle of law is involved in this case though the amount involved is just Rs. 711.45. He has reiterated the facts stated above and has pleaded destruction of goods is not covered under Rule 173L of the Central Excise Rules, 1944. He has also referred to Calcutta High Court judgment in the case of Incheck Tyres Ltd. v. Asstt. Collector of Customs and Ors. reported in 1977 E.L.T. (J. 236) wherein it was held : "if such a right of refund is conferred by the Statute and if there is any condition imposed to the exercise of that right, that would be binding on that person concerned and he cannot claim his right to refund without such condition. Any such provision in any Statute is legal and valid." He has also referred to a Government of India decision in the case of Prakash Cotton Mills Ltd. reported in 1981 E.L.T. 216 wherein it was held that there is no provision for granting any refund of duty when the goods are destroyed at any post clearance stage in such cases after clearance of the goods on payment of duty. He has pleaded that in view of these arguments the appellant's appeal should be admitted and accepted.
5. In reply, Shri K.P. Bhattacherjee, the learned consultant has pleaded that the returned goods have been duly accounted for and are correctly correlated. He has referred to Rule 73L, Sub-clause (ii) of Sub-rule (1) ibid wherein it has been provided that the goods are to be examined within 72 hours from the receipt in the factory viz.
information is to be given to the Excise Authorities within 24 hours of the re-entry of the goods and an inspection has to be made by the Revenue Authorities within the next 48 hours. He has pleaded that the information was sent on 7th April, 1981 and the goods were received on 4th April, 1981 at 5 p.m. and as such the information was duly sent within 72 hours. He has pleaded that there is bona fide lapse on the part of the appellant in sending the intimation beyond 24 hours.
However, the purpose of law is fully served if the intimation is sent within 72 hours. He has also referred to Sub-rule (4) of Rule 173L ibid which says that the Central Government may, for reasons to be recorded in writing, relax the provision of this Rule for the purpose of admitting a claim for refund. He has submitted that the respondent should not be made to suffer for mere technical lapses. He has further pleaded that there is complete correlation of the goods and the allegations in the order passed by the Asstt. Collector are not correct. The appeal filed by the Revenue should be dismissed.
6. After hearing both the sides and going through the facts and circumstances of the case, I hold that the destruction of goods is not covered by Rule 173L of Central Excise Rules, 1944. Rule 173L pertains to refund of duty on goods returned to factory for being re-made, re-fined, re-conditioned or subjected to any other similar process in the factory. The destruction of goods is not covered by any of the circumstances mentioned above. Rule 173L is reproduced as under : (1) The Collector may grant refund of the duty paid on manufactured excisable goods issued for home consumption from a factory, which are returned to the same or any other factory for being re-made, refined, reconditioned or subjected to any other similar process in the factory : (i) such goods are returned to the factory within one year of the date of payment of duty or within such further period or periods not exceeding one year in the aggregate, as the Collector may, on sufficient cause being shown, permit in any particular case; (ii) the assessee gives information of the re-entry of such consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry to enable the proper officer to verify the particulars of such goods within forty-eight hours of receipt of the information; (iii) the assessee stores the said goods separately pending their being re-made, refined, reconditioned or subjected to any other similar process in the factory unless otherwise permitted by the Collector by an order in writing and makes such goods available for inspection by the proper officer when so required.
Provided further that in relation to the declared excisable goods, for Clause (ii) of the first proviso, the following clause shall be substituted, namely : - (ii) The assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry.
(2) The assessee shall maintain a detailed account of the returned goods and the process to which they are subjected, after their return to the factory in the proper form.
(3) No refund under Sub-rule (1) shall be paid until the processes mentioned therein have been completed and an account under Sub-rule (2) having been rendered to the satisfaction of the Collector within six months of the return of the goods to the factory. No refund shall be admissible in respect of the duty paid :- (i) in respect of opened packages containing goods with concessional rates of duty or partial exemption for the small or cottage sector, as set forth in the First Schedule to the Act, or by a notification issued under Rule 8; (ii) if the amount of refund payable on the goods is less than rupees fifty; (iii) on goods which are disposed of in any manner other than for production of goods of the same class; (iv) on the unmanufactured tobacco from which cigars, cheroots and cigarettes so returned to the factory, have been produced; (v) if the value of the goods at the time of their return to the factory is, in the opinion of the Collector, not less than the amount of duty originally paid upon them at the time of their clearance from the factory.
(4) The Central Government may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund," A simple perusal of the second proviso to Sub-rule (1) of Rule 173L shows that the information of re-entry of excisable goods into the factory to the proper officer in writing in the proper form has to be made within 24 hours of such entry. The argument of the learned counsel, Shri K.P. Bhattacherjee that -the respondent had sent necessary intimation within 72 hours is not tenable since destruction is not covered under Rule 173L and there is no other corresponding provision under the-Central Excises and Salt Act, 1944 and Central Excise Rules, 1944.
7. I accept the appeal filed by the Revenue and quash the order passed by the Collector (Appeals). In the result, the appeal is accepted.