Customs, Excise and Gold Tribunal - Bangalore
Nestle India Ltd. vs Cce on 15 April, 1997
Equivalent citations: 1997(72)ECR782(TRI.-BANGALORE)
ORDER A.C.C. Unni, Member (J)
1. This appeal is directed against the order-in-appeal dated 31.3.1994 given by the Collector (Appeals), Customs, Bangalore. It pertains to a claim of refund of Rs. 1,65,393.00.
2. The appellant company is engaged in the manufacture of various food products including instant coffee. Instant coffee manufactured by them is sold both in the domestic market as well as sent for export. For exported instant coffee no payment of duty is made but is under a bond procedure. According to the appellants on certain occasions due to urgent export obligations duty-paid instant coffee cleared for domestic consumption is recalled to their factory for repacking as per specifications laid down by the importer and as per the legal requirement for export clearance. The dispute relates to refund claim of excise duty paid by them initially for clearance of instant coffee for home consumption and subsequently brought back to the factory under Rule 173-L for being repacked for export to Nepal on payment of excise duty once again.
3. The lower authorities rejected the refund application and Collector (Appeals) by the impugned order held that, though the goods cannot be charged to duty twice as contended by the appellants, in the absence of any provision under Rule 173-L, sanction of refund under the said Rule cannot be allowed.
4. Appearing for the appellants before me Ms. Amita Mitra, Ld. Counsel argued that this was a case of double taxation and referred to the decision of the Tribunal dated 2.8.1996 when the Southern Regional Bench of this Tribunal in the appellants' own case had allowed the refund. She submitted that the facts in the said case was similar to the facts in the present appeal and the issue involved was also the same and both the appeals arose out of the same order.
5. The Ld. JDR while concurring with the broad proposition laid down in the said order, however, submitted that the Collector's observation that Rule 173L did not provide for a procedure for refund was correct and also drew attention to the fact that the appellants themselves had admitted in the statement of facts in the Memorandum of Appeal that they had made the refund application under Rule 173L.
6. I have considered the submissions and gone through the order of the South Regional Bench of this Tribunal, referred to above. Paragraph 4 of the said order in which the issue has been examined in detail is extracted below:
4. We have considered the submissions of both the sides. The appellant has sought permission only for the purpose of refining and reconditioning. Repacking was not specifically mentioned therein. Therefore Rule 173L does not apply to the facts of this case. However since repacking does not amount to manufacture the appellant was not required to pay duty for the second time when the goods were cleared after repacking. In this view of the matter we are of the view that the refund application filed by the appellant should be treated as a refund claim for duty paid for the second time after the goods were repacked and cleared from the factory of the appellant for the purpose of export. This view is also supported by the decision of the Tribunal in the case of Bharat Earth Movers Ltd., Bangalore v. Collector of Central Excise, Bangalore reported in 1983 (ELT) 867 : 1983 ECR 580D (T) on which reliance was placed by the learned Advocate. In the above cited decision at para 6, the Tribunal held as follows:
6. The learned Counsel for the appellants argues that the excisability of goods arose in July 1975 when they were cleared from the factory for the first time: the fact of their return to the factory-with or without the approval of the departmental authorities and with or without the observance of formalities that could have been prescribed-does not make any difference to this basic position in law. The goods were not liable to payment of duty at the time they were taken out of the factory in 1979. We agree with this view that the excisability of any manufactured goods arises when they are removed from the factory of manufacture in terms of Central Excises Act and the Rules thereunder. Any subsequent manipulation of the goods such as export, return to the factory etc. does not bring into being a new product which becomes liable to excise duty a second time. We note that in the present case it is not the contention of the Department that the dumper which was returned are subjected to any processes which would constitute manufacture and hence may raise a question as to whether new goods have come into being. In the result we allow the appeal and order consequential relief.
In the premises we hereby allow the appeal of the appellant in the above terms stating that the refund application filed by the appellant should be treated as an application for refund of the duty paid for the second item when the goods were removed after repacking and this refund application shall be dealt with in accordance with law and within a period of 3 months as far as possible from the date of receipt of this order.
7. Since I find that the issue before me is covered by the observations extracted above, I find that the appeal has merit and has to be allowed. Following the ratio of the order extracted above the appeal is allowed and impugned order set aside. Ordered accordingly.
(Dictated and pronounced in the open Court).