Repacking and re-labelling treated as manufacture, so refund could not be denied on that ground.

Sorting, repacking and clearing duty-paid damaged goods was treated as manufacture where the relevant tariff chapters specifically covered repacking and re-labelling, so refund under Rule 173L could not be denied on that objection. The factual position that the same goods were received damaged, processed in the factory, and then cleared on payment of duty was not disputed. On that basis, the refund claim was held admissible and the Revenue's objection failed.

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Issues: Whether refund under Rule 173L of the Central Excise Rules could be denied on the ground that the assessee's process of sorting, repacking and clearing the duty-paid goods did not amount to manufacture.

Analysis: The goods had been received in a damaged condition in respect of their packing, and the facts showed that after sorting and repacking, the same goods were cleared on payment of duty. The relevant tariff chapters specifically treated repacking and re-labelling as manufacture, and the Revenue did not dispute the factual position that such processes were undertaken on the duty-paid goods received in the factory. In these circumstances, the process carried out by the assessee was treated as manufacture for the purpose of the refund claim, and the refund could not be refused on the Revenue's objection.

Conclusion: The refund was held to be admissible and the Revenue's appeal failed.

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