Summary
A manufacturer of plastic moulded furniture claimed refund of excise duty on rejected goods returned by distributors under provision 173-L, which the judgment calls Section 173-L. It contended that the goods should be valued as second-hand goods or, alternatively, at raw-material value. On a market survey report, the Deputy Commissioner valued them as scrap at Rs. 8 to 10 per kg, below the duty originally paid, and denied refund under clause (v). The Tribunal and the High Court agreed. The Supreme Court dismissed the appeal. 'Value' under clause (v) means the market value of the returned goods, not raw-material value. The assessee led no consignment-wise evidence and never sought the survey report or cross-examination, so its complaint about non-supply, raised first before the High Court, could not be entertained.
Issues
- How returned goods are to be valued for refund of duty under provision 173-L, and whether raw-material value can be adopted
- Whether the assessee could complain for the first time before the High Court that the market survey report relied on was not supplied
Provisions considered
- Rule 173-L(3)(v) and Explanation (referred to in the judgment as Section 173-L), Central Excise Rules, 1944No refund is admissible where the market value of the goods on return is less than the duty originally paid. 'Value' means market value, not raw-material value, and the scrap valuation below the duty paid barred refund. (¶¶ 4, 4.1, 5)
Held
- The value of returned goods depends on the defects in each consignment, which may range from slight to near total, so the assessee had to lead evidence for each consignment. It did not. Having participated without seeking the market survey report or cross-examination, and without raising the point before the Tribunal, the assessee could not raise non-supply of the report for the first time before the High Court. (¶ 3)
- Under the Explanation to clause (v), 'value' means the market value of the excisable goods as returned. The plea that returned goods could be reused as raw material, so that raw-material value should apply, finds no support in the provision. (¶¶ 4, 4.1)
- Since the value fixed at Rs. 8 to 10 per kg was less than the duty already paid, refund was rightly denied. The concurrent findings on value, reached after giving the assessee an opportunity, did not warrant interference. (¶ 5)
Result
Appeal dismissed. The denial of the excise duty refund on returned goods was upheld; no order as to costs.