Defective returned goods qualify for duty refund under Rule 173L when they are not treated as scrap.

Returned glass shells that are defective, rather than scrap, remain within the scope of refund relief under Rule 173L of the Central Excise Rules, 1944. The record supported the finding that the goods sent back by the customer were defective glass shells and not scrap, and treating every defective return as scrap would render Rule 173L ineffective. On that basis, the assessee was entitled to refund of the duty originally paid.

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Issues: Whether the glass shells returned by the customer were scrap or defective goods, and whether the assessee was entitled to refund of duty under Rule 173L of the Central Excise Rules, 1944.

Analysis: The finding of the lower appellate authority that the returned goods were not scrap but defective glass shells was supported by the record and was not shown to be invalid. A view already taken in similar matters was followed that treating every defective return as scrap would make Rule 173L of the Central Excise Rules, 1944 ineffective.

Conclusion: The returned goods were defective glass shells and not scrap, and the assessee was entitled to refund of the duty originally paid under Rule 173L of the Central Excise Rules, 1944.

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