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2005 (11) TMI 313 - AT - Central Excise
Issues:
Claim for refund of duty under Rule 173L for returned components and subsequent clearance of a full machine to another party. Analysis: The appellants, manufacturers of textile machinery, cleared a knitting machine to a buyer and later received two major components returned by the buyer. The appellants then supplied replacement components to the buyer before incorporating the returned components into a full machine, which was cleared to another party. The appellants filed a claim for refund of duty paid on the replacement components, which was rejected by lower authorities. The main issue revolved around whether the goods returned and subsequently cleared were of the same class, as required by Rule 173L for claiming a refund. The consultant for the appellants relied on a Tribunal decision stating that goods falling within the same Tariff Heading should be treated as goods of the same class. However, the respondent argued that the returned components and the subsequent full machine were classified under different Tariff Headings, making them not of the same class. The Tribunal cited previous decisions to support this argument, emphasizing that the goods were not of the same class. Upon careful consideration, the Tribunal found that the basic condition for a refund under Rule 173L was not met by the appellants. The returned components were incorporated into a different class of goods, the knitting machine, which was cleared to another customer. The Tribunal concluded that the goods returned and subsequently cleared were not of the same class, rendering the refund claim inadmissible. Additionally, the appellants failed to fulfill the requirement that the second clearance must be after the necessary process outlined in the Rule. Therefore, the appeal for a refund was dismissed due to non-compliance with the mandatory conditions of Rule 173L.
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