Refund of double duty on returned goods is admissible under the returned-goods refund framework.

Refund of duty was admissible where goods had suffered duty on original clearance, were later returned, reprocessed by defoiling and refoiling, and cleared again on payment of duty. The applicable returned-goods refund framework under Rule 173L and Section 11B was read to permit recovery where duty had effectively been collected twice on the same goods. Prior decisions recognising refund of double duty on returned goods were followed, and the claim was treated as falling within the refund provisions. The Department's rejection of refund was therefore not sustainable.

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Issues: Whether refund was admissible on goods that had been cleared on payment of duty, returned, defoiled and refoiled, and cleared again on payment of duty, in the light of Rule 173L and Section 11B.

Analysis: The goods had suffered duty at the time of the original clearance and duty was again paid on subsequent clearance after return and reprocessing. The dispute turned on whether the assessee could recover the duty collected a second time. The prior decisions relied upon recognised refund of duty paid twice on returned goods, and the same principle was applied to the facts of the present case. On that basis, the claim was held to be within the scope of the refund provisions and the applicable rule governing returned goods.

Conclusion: The refund claim was admissible and the rejection of refund was not sustainable.

Final Conclusion: The assessee succeeded in establishing entitlement to refund of duty paid twice on the returned goods, and the Department's challenge failed.

Ratio Decidendi: Where duty has been paid on original clearance and again on subsequent clearance of returned goods, refund is admissible under the returned-goods refund framework and the double collection cannot be retained.

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