1. As the facts and circumstances in the above two cases are the same and are directed against the same order of the Collector of Central Excise (Appeals), Madras, they are being disposed of together.
2. These two appeals, one by M/s. Foods, Fats and Fertilisers (hereinafter referred to as the Company) (Appeal No. 446/83) and the other by the Collector of Central Excise, Guntur (Appeal No. 471/83) are against the order of the Collector of Central Excise (Appeals), Madras, dated 1-9-83 in C. No. V/68/178/83 which itself is with reference to the order of the Assistant Collector of Central Excise, Eluru, in C. No. V/68/18-4-1983 MP.1 dated 10-5-1983. The Company claimed a refund of Rs. 25,375.24 being the duty paid on three consignments of Hydrogenated hardened rice bran oil of 31.415 MTS.removed under Gate Passes Nos. 129/17-10-82, 130/18-10-82 and 131/18-10-82 to M/s. Hindustan Lever Ltd., Calcuta. It was stated that the said three consignments were rejected by the consignee due to MIV (moisture, impurity and volatile matter) and were brought back to the Co's factory. The Assistant Collector held that "the provisions of Rule 173L do not apply to the cases of outright rejection of the consignments by the consignee in the absence of any documentary evidence that the consignments are in fact returned by the consignee to the factory for being re-made, refined or re-conditioned". While examining an appeal from the Company against this order, the Collector (Appeals) noted that the claim of the Company had been rejected by the Assistant Collector on three counts :- (1) The D-3 intimation in respect of consignment lifted under gate pass No. 129/17-10-1982 was not filed within 24 hours of receipt as stipulated under proviso (iii) to Rule 173L.
(2) Appellants have accounted for only 30.170 MTS of the commodity, as against the original quantum of 31.415 MTS. (3) Consignments were not returned to the factory by M/s. Hindustan Lever Ltd. for purpose of either remaking, refining or reconditioning.
The Collector (Appeals) found that the provisions of Rule 173L regarding return of the goods were not properly appreciated by the Assistant Collector. He observed that he did not concur in the view that the subject consignment (on remaking ?) should be resold to the same buyer (Hindustan Lever Ltd. ?) and that the Company was justified instating that Hindustan Lever Ltd. did not have the authority or power to suggest manufacturing rectification unless they had rejected the consignments outright. He, however, found that D 3 intimation in respect of Gate Pass No. 129/17-10-82 was not received within 24 hours of the arrival of the consignment at the factory. In view of the clear provisions of Rule 173L(ii) he found that refund in respect of this part of the goods was not admissible. In so far as shortage was concerned, he decided that the Rule does not contemplate that an identical quantity must emerge after reprocessing to qualify for refund. Thus, he allowed the appeal to him in respect of Gate Passes Nos. 130 and 131 but rejected the same in respect of Gate Pass No. 129.
In respect of the claim admitted by the Collector (Appeals), the Collector of Central Excise, Guntur, has come up in appeal before the Tribunal in appeal No. 471/83 and in respect of the claim disallowed by the Collector (Appeals), the Company has come up in appeal before the Tribunal in No. 446/83.
3. The Collector of Central Excise submits that there is no provision in Rule 173L to sanction refund of duty on the quantity lost in the reprocessing operations and that provisions of Rule 173L do not apply to cases of outright rejection of consignments by a consignee in the absence of documentary evidence that the consignments are returned by the consignee to the factory for being remade, refined or re-conditioned. Hence, he contends that no refund is admissible in terms of Rule 173L in respect of all the three consignments in question.
4. The Senior Departmental Representative during the hearing referred to the 'Law Dictionary' by Biswas, Second Edition, which indicates that 'return' is a bilateral action whereas rejection is a unilateral one.
When some goods are returned, it involves consent of two parties whereas rejection can be done by either party in a transaction. The use of 'return' to the same factory occurring in Rule 173L would suggest that the goods should, after reprocessing, go back to the same consignee. The representative of the Company disputes this stand.
5. Rule 173L provides that when goods are returned to the same factory for being remade, refined, reconditioned or subjected to any other similar process, refund will be due subject to certain other conditions being fulfilled. No doubt, the act of return involves two parties, the consignee and the consignor. Here, the consignee, viz. Hindustan Lever Ltd., rejected the goods which came back to the Company, the consignor, and the Company obviously accepted the goods which were rejected and took them up for re-making etc. Thus, the sense of duality referred to by the Senior Departmental Representative is very much there in the present transaction. The submission that after reprocessing the goods must go back to the original consignee is not warranted by the wording of Rule 173L. In this view of the matter, we agree with the finding of the Collector (Appeals) that the provision of Rule 173(1) would apply to all the three consignments in question.
6. The ether point raised on behalf of the Collector of Central Excise is that no refund is due in respect of quantities found short after reprocessing. This is not borne out by the provisions of the Rule 173L itself. So long as the proof of return of a specified quantity is available, the manner in which the returned goods are reprocessed is available and accounting of the various resultant products is done, refund of duty paid initially becomes due. That in the course of remaking, reconditioning or reprocessing, some of the original goods get lost would not prevent the refund of duty originally paid.
7. Turning now to the plea of the Collector regarding late intimation of D. 3 in respect of gate pass No. 129, we note that Rule 173L (ii) provides that intimation of re-entry of the goods into the factory should be given to the proper officer in writing in proper form within 24 hours of such re-entry to enable the proper officer to verify particulars of such goods within 48 hours of receipt of the information. The delay in giving intimation is said to be due to the intervening holidays when the Department's office remained closed. The Senior Departmental Representative points out that whatever be the reason for the delay, the intimation should be filed in time. The plea taken on behalf of the Company that under Rule 173L(4) relaxation could be given is resisted by him on the score that relaxation could only be given by the Central Government, the rule making authority itself.
8. A literal reading of Rule 173L does give the impression that intimation of re-entry of the goods has to be given within 24 hours of such re-entry. However, the object of the intimation is indicated in the Rule itself, viz. to enable the proper officer to verify the particulars of such goods within 48 hours of receipt of the information. We note that Section 10 of the General Clauses Act provides that in any Central Act or Regulation, any act is directed to be done within a prescribed period and if the office is closed on that day or the last lay of the prescribed period, the act shall be considered as done in due time if it is done on the next day afterwards on which the office is open. We are aware that it has been held the provisions of the General Clauses Act are not applicable to rules made under an Act but only to an Act or Regulation. However, considering the intention behind the need for intimation and the general principle set out in the General Clauses Act, we think it is only just if the delay caused by the Department's office remaining closed is not reckoned in computing the period of 24 hours. In this connection, we have been referred, on behalf of the Company, to a Trade Notice No. 15/83 issued by the Additional Collector of Central Excise, Hyderabad, in which it is stated that holidays on which the Central Excise Office is closed are to be excluded for computing the aforesaid period prescribed under the various Central Excise Rules. It is not known if this Trade Notice is based on a relaxation granted by the Central Government in terms of Rule 173L(4). In the circumstances of the case, we are inclined to extend the benefit of this Trade Notice to the present case. Hence, we find that the benefit of Rule 173L be extended to all the three consignments covered by Gate Pass No. 129/ 17-10-82, 130/18-10-82 and 131/18-10-82.
9. In the result, Appeal No. 446/83 of M/s. Foods, Fats and Fertilisers is allowed and Appeal No. 471/83 of the Collector of Central Excise, Guntur, is dismissed.