1. By letter No. 23/30/20/01 dated 4-9-1981, M/s. lata Finlay Limited have appealed against the Appellate Collector of Central Excise Madras's rejection of their appeal by his order No. 69/81 dated 22-4-1981. This order arose from the order of the Assistant Collector of Central Excise, Ernakulam II Division C. No. V/3/18/66/79 dated 16-8-1980 in which he rejected two refund claims by M/s. Tata Finlay for Rs. 59,455.23 and Rs. 26,256.29 as he held that they were inadmissible under Rule 173M, Sub-rule (2) (iii) of the Central Excise Rules, 1944.
2. M/s. Tata Finlay Limited claimed the refund because some package tea, which had been brought for export out of India, could not be shipped and was brought back to the factory and was repacked into loose tea. The Assistant Collector rejected the claims for reasons we have recorded. He also reasoned that the word "class" used in Rule 173M (2)(iii) directed distinction and loose tea is recognised commercially in the market as distinct from package tea. Furthermore, Central Excise Law makes clear distinctions between loose tea and package tea for classification and rate of duty.
3. The Appellate Collector agreed with the Assistant Collector and said also that the package tea got converted into loose tea and so changed from one tariff head to another. For this reason, he found it impossible to hold that the goods had been used for production of goods of the same class.
4. Before us, the appellants have repeated most of what they told the lower authorities-how the tea came to be repacked and why it had to be repacked etc etc. They say that the repacking was done entirely under Central Excise supervision and they had, to the best of their knowledge, complied with all the requirements of Rule 173M. They had to repack (he package tea as their buyer wanted it loose, and they could not but oblige him as he was an old customer. They had converted tea into tea-a good of the same class. Therefore, they were entitled to the refund.
Goods cleared for export may be allowed to be returned to the factory. (1) The Collector may allow manufactured excisable goods cleared for export under claim for rebate or in bond but, not exported for any reasons to be returned to the same factory or any other factory for being remade, refined, reconditioned, or subjected to other similar processes in the factory.
7. To begin with we do not know if the Collector allowed the return of this tea to the factory; but as nobody says anything to the contrary, we will take it he did. It is not known if the goods were cleared for export under claim for rebate or in bond-the Assistant Collector's order is silent on this. He deals with two refund claims. We are not certain that Rule 173M was applicable. Furthermore, this rule allows goods to be returned to the factory for being remade, refined, reconditioned or subjected to other similar processes. Repacking is similar to none of the processes listed here -it is not similar to remaking or refining or reconditioning.
No refund shall be paid until the processes mentioned in Sub-rule (1) have been completed and an account under Clause (iv) of that Sub-rule has been rendered to the satisfaction of the Collector within six months of the return of the goods to the factory.
9. We know that the process carried out was not one of the three envisaged in Sub-rule (1). [Nor does it appear that an account was rendered to the Collector : but we will not labour this here as it is not necessary.] For this reason alone, the refund must be rejected under Rule 173M.10. It, further, appears to us that M/s. Tata Finlay did not proceed on the provisions of Rule 173M. They merely claimed refund because the duty paid package tea had been brought back to the factory and repacked into loose tea. There is no provision in the law for such refund.