Central Excise Act, 1944 – s.173L – Central Excise Rules – Claim for refund of excise duty – Assessee if entitled to the refund to the extent of the value of the returned goods – Held: No cogent evidence was led by the assessee on the value of the returned goods – Value of the returned goods depend on the defects found in the manufactured goods which are returned – It varies considering the defects – Therefore, the assessee has to lead the evidence with respect to each consignment of the returned goods, which the assessee failed to prove in the present case – Further, as the value of the returned goods determined by the Deputy Commissioner at Rs.8 to 10 per kg is found to be less than the amount of duty already paid, the appellant is rightly denied the refund of the excise duty paid – Denial of the refund is in consonance of s.173L(v) – Concurrent findings recorded by the adjudicating authority, the Tribunal and the High Court on the value of the returned goods not required to be interfered with in the present proceeding more particularly when the same was determined by the Deputy Commissioner/Assessing Authority after giving opportunity to the assessee – Neither the Deputy Commissioner nor the Tribunal or even the High Court have committed any error in rejecting the refund claim of the assessee. Central Excise Act, 1944 – s.173L – Value for refund u/s.173L – Held: For the purpose of considering the value for refund u/s.173L what is required to be considered is the value of the returned goods – As per explanation to clause (v) of s.173L, “value” means the market value of the excisable goods and not the exduty value thereof – Therefore, the submission on behalf of the assessee that the returned goods may be treated as a raw material and therefore the “value” of the raw material can be considered for the purpose of “value” while determining the refund u/s.173L cannot be accepted.
ORS.
Dismissing the appeal, the Court
HELD: 1.1 Neither the Deputy Commissioner nor the Tribunal or even the High Court have committed any error in rejecting the refund claim of the assessee. At the outset, it is required to be noted that after giving an opportunity to the assessee on the value of the returned goods and considering the material on record including the market survey report the Department determined the value of returned goods at Rs.8 to
10 per kg. No cogent evidence was led by the assessee on the value of the returned goods. The assessee only produced the invoices with respect to secondary market. However, it is required to be noted that the value of the returned goods depend on the defects found in the manufactured goods which are returned. It varies considering the defects. In some returned goods the defect might be 5% and in some goods the defect might be 80% to 90%. Therefore, the assessee has to lead the evidence with respect to each consignment of the returned goods, which the assessee failed to prove in the present case. The Department heavily relied upon the market survey report and thereafter determined the value of the returned goods as Scrap at the rate of Rs.8 to 10 per kg. The assessee participated in the proceedings before the Deputy Commissioner. The assessee neither asked for copy of the market survey report nor asked for any cross examination on the market survey report and/or led any cogent evidence on the value of the returned goods. Such a grievance of non-supply of market survey report was even not raised before the learned Tribunal. Therefore, thereafter it is not open for the assessee to raise the issue with respect to non-supply of the market survey report for the first time before the High Court. [Para 3][224-F-H; 225-A-C]
1.2 The submission on behalf of the assessee that as the returned goods can be reusable for the manufacture of the products and therefore the value of the raw material can be considered for the purpose of determination of the value for refund is concerned the same is not supported by any statutory provision, more particularly Section 173L of the Central Excise Act and/or even the Central Excise Rules. Therefore, for the purpose of considering the value for refund under Section 173L what is required to be considered is the value of the returned goods. As per explanation to clause (v) of Section 173L, “value” means the market value of the excisable goods and not the exduty value thereof. Therefore, the submission on behalf of the assessee that the returned goods may be treated as a raw material and therefore the “value” of the raw material can be considered for the purpose of “value” while determining the refund under Section 173L cannot be accepted. As the value of the returned goods determined by the Deputy Commissioner at Rs.8 to 10 per kg is found to be less than the amount of duty already paid, the appellant is rightly denied the refund of the excise duty paid. Denial of the refund is in consonance of Section 173L (v) of the Central Excise Act. There are concurrent findings recorded by the adjudicating authority, the Tribunal and the High Court on the value of the returned goods which are not required to be interfered with by this Court in the present proceeding more particularly when the same was determined by the Deputy Commissioner/Assessing Authority after giving opportunity to the assessee. [Paras 4, 4.1 and 5][225-C-D; 226-B-E]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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