M/S Crompton Greaves Ltd., Mohali Vs. Cce, Chandigarh - Court Judgment

Excerpt:
1. this appeal is against rejection of a refund claim filed by m/s northern digital exchange ltd. ( in short, ndel ) under rule 173l of the central excise rules. the refund claim was in relation to one epabx ne-1200 system and three atts which were manufactured by ndel and cleared on payment of duty under gp1 dated 31.03.1993 to the railways at allahabad on the instructions of m/s crompton greaves ltd. delhi. it appears that m/s crompton greaves ltd. were to install the above systems at the allahabad premises of the railways under a contract between the two and that m/s crompton greaves ltd. had placed purchase order with ndel for the above goods, instructing specifically that the goods should be delivered at railways' premises. m/s crompton greaves ltd. found the goods to be defective and returned the same to ndel under rule 173l ibid. the latter filed d-3 intimation with the central excise range office on 03.09.1993. they subsequently cleared the goods after repairs/reconditioning etc. for home consumption, on payment of duty. later on, ndel filed with the department of aforesaid refund claim for refund of the duty paid on the goods originally at the time of clearance under the aforesaid gp1. the department by showcause notice (scn) proposed to reject the refund claim on the ground that the goods originally cleared by ndel were returned by m/s crompton greaves ltd. new delhi instead of the railways, allahabad and on the further ground that the goods so returned were not correlated with the original goods cleared by ndel on payment of duty. the notice was contested by ndel and the dispute was adjudicated upon by the assistant commissioner, who rejected the refund claim by upholding the allegation in the scn. the appeal of ndel against the order of the assistant commissioner was rejected by the commissioner (appeals). hence the present appeal before the tribunal.2. this appeal was filed by m/s crompton greaves ltd. as successors-in-interest of m/s ndel, the former having taken over the latter.3. heard both sides. ld. advocate shri sudeep singh for the appellants submits that, if necessary verification had been made by proper officer of the central excise range upon receipt of the d-3 intimation submitted by ndel, the goods returned by m/s crompton greaves ltd. new delhi would have been found to be correlated with the goods originally cleared on payment of duty by ndel to the railways, allahabad under the gate pass. for purposes of rule 173l, it is immaterial as to whether the goods were returned by the railways from allahabad or by m/s crompton greaves ltd., from delhi. what is to be ascertained is whether the returned goods were correlatable to the goods originally cleared by ndel. such correlation ought to have been done by the proper officer upon receipt of the d-3 intimation. that was not done. ld. advocate further submits that, given an opportunity, the appellants would still be able to convince the departmental authorities of the correlatability of the goods. therefore, in case the appeal is not allowed as prayed for, 1d. advocate submits,the matter may remanded to the appropriate authority for giving an opportunity to the appellants to substantiate their refund claim.4. ld. sdr shri a.k. jain submits that no evidence whatsoever was available to the adjudicating authority or to the appellate authority to show that returned goods were the same as the goods originally cleared by the appellants under gp1 dated 31.03.1993 and, therefore, the orders of the two authorities were not to be faulted. it is his further submission that even the document covering return of the goods to ndel under rule 173l was not made available to the authorities. ld.sdr prays for rejecting the appeal.5. examined the above submissions. i not that, on receipt of the d-3 intimation from ndel, the department by scn asked them to show cause why the refund claim should not be rejected. the main ground on which the scn was issued was that the goods returned under rule 173l were not correlated to the goods originally cleared by ndel under the gp1.therefore, it was the burden of the appellants to correlate the goods.this burden, apparently, could not be discharged successfully by the appellants. it has been submitted by 1d.counsel that, if an opportunity is given for such correlation, the appellants would be able to substantiate their claim. in view of this submission of 1d. counsel, i am inclined, for the ends of justice, to give an opportunity to the appellants. accordingly, the orders of the lower authorities are set aside and the matter is remanded to the adjudicating authority for fresh decision on the refund claim in accordance with law, after allowing the claimants to adduce additional evidence in support of the claim and after giving them reasonable opportunity of being personally heard.

Judgment:
1. This appeal is against rejection of a refund claim filed by M/s Northern Digital Exchange Ltd. ( in short, NDEL ) under Rule 173L of the Central Excise Rules. The refund claim was in relation to one EPABX NE-1200 System and three ATTs which were manufactured by NDEL and cleared on payment of duty under GP1 dated 31.03.1993 to the Railways at Allahabad on the instructions of M/s Crompton Greaves Ltd. Delhi. It appears that M/s Crompton Greaves Ltd. were to install the above systems at the Allahabad Premises of the Railways under a contract between the two and that M/s Crompton Greaves Ltd. had placed purchase order with NDEL for the above goods, instructing specifically that the goods should be delivered at Railways' premises. M/s Crompton Greaves Ltd. found the goods to be defective and returned the same to NDEL under Rule 173L ibid. The latter filed D-3 intimation with the Central Excise Range Office on 03.09.1993. They subsequently cleared the goods after repairs/reconditioning etc. for home consumption, on payment of duty. Later on, NDEL filed with the Department of aforesaid refund claim for refund of the duty paid on the goods originally at the time of clearance under the aforesaid GP1. The Department by showcause notice (SCN) proposed to reject the refund claim on the ground that the goods originally cleared by NDEL were returned by M/s Crompton Greaves Ltd. New Delhi instead of the Railways, Allahabad and on the further ground that the goods so returned were not correlated with the original goods cleared by NDEL on payment of duty. The notice was contested by NDEL and the dispute was adjudicated upon by the Assistant Commissioner, who rejected the refund claim by upholding the allegation in the SCN. The appeal of NDEL against the order of the Assistant Commissioner was rejected by the Commissioner (Appeals). Hence the present appeal before the Tribunal.

2. This appeal was filed by M/s Crompton Greaves Ltd. as successors-in-interest of M/s NDEL, the former having taken over the latter.

3. Heard both sides. Ld. Advocate Shri Sudeep Singh for the appellants submits that, if necessary verification had been made by proper officer of the Central Excise Range upon receipt of the D-3 intimation submitted by NDEL, the goods returned by M/s crompton Greaves Ltd. New Delhi would have been found to be correlated with the goods originally cleared on payment of duty by NDEL to the Railways, Allahabad under the Gate Pass. For purposes of Rule 173L, it is immaterial as to whether the goods were returned by the Railways from Allahabad or by M/s Crompton Greaves Ltd., from Delhi. What is to be ascertained is whether the returned goods were correlatable to the goods originally cleared by NDEL. Such correlation ought to have been done by the proper officer upon receipt of the D-3 intimation. That was not done. Ld. Advocate further submits that, given an opportunity, the appellants would still be able to convince the Departmental authorities of the correlatability of the goods. Therefore, in case the appeal is not allowed as prayed for, 1d. Advocate submits,the matter may remanded to the appropriate authority for giving an opportunity to the appellants to substantiate their refund claim.

4. Ld. SDR Shri A.K. Jain submits that no evidence whatsoever was available to the adjudicating authority or to the appellate authority to show that returned goods were the same as the goods originally cleared by the appellants under GP1 dated 31.03.1993 and, therefore, the orders of the two authorities were not to be faulted. It is his further submission that even the document covering return of the goods to NDEL under Rule 173L was not made available to the authorities. Ld.

SDR prays for rejecting the appeal.

5. Examined the above submissions. I not that, on receipt of the D-3 intimation from NDEL, the Department by SCN asked them to show cause why the refund claim should not be rejected. The main ground on which the SCN was issued was that the goods returned under Rule 173L were not correlated to the goods originally cleared by NDEL under the GP1.

Therefore, it was the burden of the appellants to correlate the goods.

This burden, apparently, could not be discharged successfully by the appellants. It has been submitted by 1d.Counsel that, if an opportunity is given for such correlation, the appellants would be able to substantiate their claim. In view of this submission of 1d. Counsel, I am inclined, for the ends of justice, to give an opportunity to the appellants. Accordingly, the orders of the lower authorities are set aside and the matter is remanded to the adjudicating authority for fresh decision on the refund claim in accordance with law, after allowing the claimants to adduce additional evidence in support of the claim and after giving them reasonable opportunity of being personally heard.