TMI Blog2014 (6) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 173L of the Rules, the party could claim the refund in case of goods returned but merely because that the refund of the duty paid on the finished goods, which have been returned being defective has not been claimed under Rule 173L of the Rules, the claim of the modvat credit under Rule 57-A of the Rules can not be denied. Defective goods, may be final product, have been subjected to such process which amount to manufacturing within the definition of manufacturing under Section 2(f) of the Central Excise Act and as a result of such process a final product is obtained which is subjected to excise duty. The modvat credit under Rule 57-A of the Rules is admissible, if other conditions of Rule are fulfilled and claimed can not be denied on the ground that the assessee would have claimed refund of duty paid under Rule 173L of the Rules. - Decided against Revenue. - Central Excise Reference No. 123 of 2000 - - - Dated:- 21-4-2014 - Hon'ble Rajes Kumar And Hon'ble Shashi Kant,JJ. ORDER This is reference at the instance of Revenue. Tribunal has referred the following question: Whether in view of the specific provisions under Rules, 173H and 173L of the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rer in case such goods is being used as raw material for the manufacturing of another final product. Therefore, C.R.Coils/sheets and G.P.Coils/sheets etc., which have been manufactured by the respondent, and have been subsequently, returned being defective and used in the manufacturing of final product, is eligible for the modvat credit under Rule 57-A of the Rules. He further submitted that under Notification No.5/94 C.E.(N.T.), dtd.01.03.1994 as amended time to time. All goods mentioned in the Schedule of Central Excise Tariff are notified for the modvat credit, unless specifically excluded. The goods used by the respondent are manufactured goods and were not covered under the excluded goods and, therefore, they were eligible for the modvat credit. In case of goods returned, the refund of duty could be claimed under Rules 173L of the Rules but if it has not been claimed, it will not take away the right to claim modvat credit under Rule 57-A of the Rules. We have considered the rival submissions. Rules 57-A and Rules 173L of the Rules reads as follows: Rule 57-A. Applicability. (1) The provisions of this section shall apply to such finished excisable goods (hereafter, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification and the credit of the declared duty shall be allowed to such manufacturer. (6) Notwithstanding anything contained in sub-rule (1), the Central Government may, by notification in the Official Gazette, declare the inputs on which the duty of excise paid under section 3A of the Central Excise Act, 1944 (1 of 1944), shall be deemed to have been paid at such rate or equivalent to such amount as may be specified in the said notification, and allow the credit of such duty in respect of the said inputs at such rate or such amount and subject to such conditions as may be specified in the said notification: Provided that the manufacturer shall take all reasonable steps to ensure that the inputs acquired by him are goods on which the appropriate duty of excise as indicated in the documents accompanying the goods, has been paid under section 3A of the Central Excise Act, 1944 (1 of 1944). Rule 173L. Refund of duty on goods returned to factory---(1) The (Commissioner) may grant refund of the duty paid on manufactured excisable goods issued for home consumption from a factory, which are returned to the same or any other factory for being re-made, refined, reconditioned or subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kages containing goods with concessional rates of duty or partial exemption for the small or cottage sector, as set forth in the [Schedule to the Central Excise Tariff Act, 1985 (5 of 1986))], or by a notification issued under rule 8 [or section 5A of the Act]; (ii) if the amount of refund payable on the goods is less than rupees fifty; (iii) on goods which are disposed of in any manner other than for production of goods of the same class; (iv) on the unmanufactured tobacco from which cigars, cheroots and cigarettes so returned to the factory have been produced; (v) if the value of the goods at the time of their return to the factory is, in the opinion of the [Commissioner], less than] the amount of duty originally paid upon them at the time of their clearance from the factory. Explanation.---In this clause, value means the market value of the excisable goods and the ex-duty value thereof.] (4) The [Commissioner] may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund. (5) The provisions of this rule shall not apply to excisable goods manufactured,---- (i) in a free trade zone and return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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