Full Judgment
2. The undisputed facts are that the appellants cleared switchgear with accessories on payment of duty under G.P. No. 584, dated 3-6-1983. They were, however, returned to the factory, whereupon a D-3 declaration was filed by the appellants for receiving the goods back for being remade, repaired or reconditioned under the provisions of Rule 173H. Re-entry of the goods, as per D-3 declaration, has been made on 28-8-1984 (after a period of one year). However, the goods, have been cleared on payment of duty without any such processes being done by the appellants and this removal was to another customer. This has been cleared second time on payment of duty under G.P. No. 1299, dated 22-10-1984. The appellants claimed refund of duty in respect of the payment made under G.P. No. 1299, dated 22-10-1984, by filing a refund claim on 23-1-1988 on the ground that the same goods have suffered duty twice and hence second payment is to be refunded. A show cause notice was issued alleging that re-entry of the goods was done under Rule 173H but the appellants have cleared the goods again, as if they are newly manufactured goods. In the adjudication order passed by the Asstt.
Collector, he held that the appellants have failed to follow the procedure prescribed under Rule 173H and the goods have been removed without any veerence to removal of duty paid goods and duty has been paid on their own. The claim was rejected under Section 11B of the Central Excise Act. The appeal before the Collector (Appeals) was also rejected. Hence, the present appeal before me.
3. The argument of Shri A.P. Hathi, the Id. advocate may be briefly summed up as below :- (i) There is no dispute by the authorities below that the same goods have been subjected to duty twice and their claim for refund of duty paid second time is perfectly within the time limit of six months prescribed under Section 11B, the relevant date being taken either from the date of payment of duty on 22-10-1984 or from the date of re-entry of the goods (28-8-1984) since their claim for refund has been filed on 23-1-1985; (ii) Though they have brought the goods under Rule 173H, that does not mean that they cannot clear the same goods without reconditioning/repair etc. When it is not disputed that the same goods have been cleared again on payment of duty, duty paid second time on the same goods is to be refunded, since the claim has been filed within time limit prescribed under Section 11B; (iii) They are not seeking for refund under Rule 173L, of the Central Excise Rules. Their claim is only in terms of Section 11B in respect of the double payment of duty on the same goods.
4. After hearing Shri Singh, though I find that the arguments of the Id. advocate look attractive, there are certain legal aspects which are required to be looked into. Section 11B of the Central Excises Act covers refund of any duty of excise. It includes not only duty paid by mistake or otherwise disputed as also duty paid on goods exported, goods returned for being remade, reconditioning etc. Provisions are also made accordingly in that Section itself for reckoning the relevant dates, from which six months limitation is to be computed. Under Rule 51A of the Central Excise Rules, excepting as otherwise expressly provided in this Rules, no duty paid goods shall be allowed to enter or be retained in, any part or premises of a factory (emphasis supplied).
On going through the other provisions of the Cen. Excise Rules, I find that in the case of goods covered by self Removal procedure, only under provisions of Rules 173H, 173L, 173M, 173MM, goods cleared from the factory could be permitted re-entry. Since Rules 173M and 173MM relate to goods cleared for export (which is not the case in this appeal), it has to be held that the appellants can bring the goods back only under the provisions of Rule 173H or Rule 173L. The appellants, while bringing the goods, gave a D-3 declaration under Rule 173H and brought the goods declaring for repair/reconditioning etc. On that basis re-entry was allowed under Rule 173H. If they had chosen to pay duty on these goods again while clearing them again, they can seek for refund only under Rule 173L. Because re-entry of the goods is permitted expressly either under Rule 173H or Rule 173L (Rule 173M & 173MM - being not applicable to the present case). It was open for the appellants to have cleared the goods under Nil rate under Rule 173H or claimed refund under Rule 173L. Refunds under Rule 173L are also covered by Section 11B, by reckoning the relevant date as the date of re-entry of the goods. Hence, I am of the view that the appellants cannot seek to ignore the provisions of Rule 173L and read Section 11B in isolation, especially when Section 11B itself seeks to include cases of refund involved in re-entered goods. When this refund is so considered, it is obvious that the appellants had brought the goods after more than 1 year contrary to the provisions of Rule 173L and the purposes of bringing in the duty paid goods has not been satisfied as per Rule 173H or Rule 173L. The authorities could not have therefore considered the claim on merits under Section 11B. It is not the question of time bar alone that is relevant under Section 11B but also the sustainability of their claim on merits in the context of the legal provisions applicable to such re-entered goods. The Asstt. Collector has not held it as time barred but rejected under Section 11B.5. If the argument of the Id. advocate is to be accepted, it would mean that goods cleared on payment of duty can be brought in the factory after any length of time lag and kept in the factory for some time and by paying duty again, the entire provisions of Rule 173L can be set at naught, by claiming that duty has been paid second time. As can be seen from the scheme of Rules 173H & 173L, it is evident that these rules have been made only with a view to mitigating the rigors of double payment of duty on such duty paid re-entered goods. If the appellants do not choose to follow the discipline prescribed under the rules, he cannot get the benefit by looking at Section 11B in isolation, disregarding the provisions of Rule 173L.
6. I, therefore, do not propose to interfere with the orders of the authorities below.