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TMI Blog2004 (10) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Commissioner has allowed the appeals filed by the assessee-respondents and set aside the order passed by the original authority. 2. Brief facts of the case are that the assessee-respondents are engaged in the manufacture of plastic moulded crates and furniture falling under Chapters 39 and 94 for which they have set up two factories viz. Unit No. 1 and Unit No. 2 at Pondicherry. In some cases plastic moulded furniture cleared on payment of duty were returned to them due to manufacturing defects for re-making which is done by crushing and grinding the furniture into granules and melting and re-moulding into plastic furniture. For the said purpose, plastic chips obtained from grinding the returned plastic furniture are mixed up wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Smt R. Bhagyadevi, learned SDR appearing on behalf of the Revenue referred to the grounds taken in the appeals and submitted that the value of the goods at the time of return to the factory was less than the amount of duty originally paid on the goods at the time of its initial clearance from the factory. She has further submitted the assessee have shown in the balance sheet that returned goods were scraped by them and then used in the production of plastic chips/granules. They were mixed with virgin material and then used in the manufacture of moulded furniture, argued the SDR. Therefore, it was not possible to establish double payment of duty on the same goods as the entire quantity of returned material re-ground into plastic chip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unusable scrap etc. showing the basis of valuation of stock in the books of the assessee-respondents. He has further submitted that it is a fact that the returned goods were re-made and again cleared on payment of duty and therefore it cannot be said that both the goods were not of the same class. He has also invited our attention to the decision of the Tribunal in the case of (i) CCE, Trichy v. Tanfac Industries Ltd. reported in 2003 (156) E.L.T. 129 (Tri.-Chennai) on the point of determination of "same class of goods". In the said case, it was held that Sulphuric acid upgraded and utilized in the manufacture of Anhydrous Hydrofluoric acid fall under the same class of goods for the purpose of Rule 173L(3). He has further invited our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I73L proviso (ii) (iii) Receipt of the returned goods were verified by the proper officer within the stipulated time as per Rules. (iv) Proper account was maintained for the re-manufacture of the returned goods. (v) Re-made goods were removed on payment of duty. (vi) Refund claim of the duty originally paid was made within time. 6. In the background of the above undisputed factual position, the issue that arises for determination is whether the refund claim can be rejected on the ground that the assessee-respondents have contravened the provisions of Rule 173L. We note that in the present case the Commissioner (Appeals) has found that when the damaged goods were returned for re-making, they were only damaged/defective ones and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whereas in the present case, even according to the Revenue, what was returned by the dealers to the assessee's factory was defective or damaged goods and not scrap. Therefore, the ratio of the said decision is distinguishable, from the facts of the present case. We also find that the lower appellate authority has gone into the case in detail and his order reflects application of mind. As rightly observed by the lower appellate authority, explanation to Rule 49 is not relevant to the issue involved in the present case inasmuch as in the present case the issue dealt with is admissibility of refund in a situation when the duty paid goods are returned due to defects for repair/remaking/reconditioning and return in terms of Rule 173L. This asp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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