1. Appeal under Section 35B of the Central Excises and Salt Act, 1944, praying that in the circumstances stated therein the Tribunal will be pleased to order refund of Rs. 1,09,600/- being Central Excise duty paid on the goods twice.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri B. Ramesh, Advocate, for the appellants and upon hearing the arguments of Shri S.K. Choudhury, Senior Departmental Representative, for the respondent, the Tribunal makes the following.
3. This petition is filed before the Tribunal against the Order-in-appeal No. 153/82(B), dated 8-6-1982 of the Appellate Collector of Central Excise, Madras passed under Section 35 of the Central Excises and Salt Act, 1944, rejecting their appeal against the Order-in-original C. No. V/68/18/31/1980, dated 30-11-1981 of the Assistant Collector of Central Excise, Bangalore East Division. The appellants preferred a refund claim for Rs. 1,09,600/- being excise duty paid at the time of second removal of the goods on the ground that the duty was paid for the second time erroneously. Observing that duty has been paid on the second removal correctly in terms of Rule 9A of the Central Excise Rules, 1944, the Assistant Collector rejected the appellants' claim for refund. The Appellate Collector also upheld the order of the lower authority and rejected the appeal.
4. The relevant facts of the case are that a Haulpak Dumper was cleared by the appellants from the factory of manufacture on 11-7-1975 after payment of duty assessed at the rate of 1% ad valorem under Item 68 of the Central Excise Tariff. The dumper was sent to Baghdad for displaying it in an International Trade Fair. On its return to India it was brought into the factory on 11-10-1977'. On a subsequent sale to Coal India Ltd., the dumper was taken out of the factory on 9-10-1979.
Duty was paid in October, 1979 at the rate of 8% under Item 68 of the Central Excise Tariff. In passing, we note the rate of duty has increased in the interval ; the value of the goods has also been shown differently so as to be in conformity with contemporaneous value at the relevant time.
5. The appellants filed a claim for refund of the duty paid in 1975.
The claim has not yet been finalised, one way or the other. The present appeal arises from a claim for refund of the duty paid in October 1979 on the score that on the second occasion the goods were not liable to pay any duty of excise at all. The claim has been rejected by the Assistant Collector of Central Excise, Bangalore East Division observing : "if the said equipment has been brought back and cleared for home consumption and there is no provision by which such clearance can be made without payment of duty, duty is payable on second removal under Rule 9A(2)." The Appellate Collector of Central Excise, Madras in confirming the order of the Assistant Collector has observed, "They would have done well had they pursued their first claim for refund of Rs. 9,453.70 to its logical conclusion, because, in the event of its rejection, they had the Appellate and Revisionary remedies in the chain of events at the departmental level. Having dropped that course and, at the same time, having paid the duty at the higher rate once more and sought back this amount now, they have apparently been approaching for a relief which the law' as it stands now, cannot allow, however well based it may be on equity. In this view of the matter I agree with the lower authority's finding that there is no provision which permits such clearance for home consumption without payment of duty." 6. The learned counsel for the appellants argues that the excisability of goods arose in July 1975 when they were cleared from the factory for the first time ; the fact of their return to the factory-with or without the approval of the departmental authorities and with or without the observance of formalities that could have been prescribed-does not make any difference to this basic position in law.
The goods were not liable to payment of duty at the time they were taken out of the factory in 1979. We agree with this view that the excisability of any manufactured goods arises when they are removed from the factory of manufacture in terms of Central Excises Act and the Rules thereunder. Any subsequent manipulation of the goods such as, export, return to the factory etc. does not bring into being a new product which becomes liable to excise duty a second time. We note that in the present case it is not the contention of the Department that the dumper which was returned as subjected to any processes which would constitute manufacture and hence may raise a question as to whether new goods have come into being. In the result, we allow the appeal and order consequential relief.