Rule 173L refund denied where returned gaskets were not reprocessed before removal and were only repacked after duty-paid clearance.

Refund under Rule 173L of the Central Excise Rules, 1944 was available only where returned excisable goods were taken up in the factory for remaking, refining, reconditioning or another similar process before removal. The returned gaskets were received in time and intimation was given, but they were not subjected to any stipulated process before removal; they were only repacked into gasket sets after duty-paid clearance. Because the condition precedent for refund was not met, the refund claims were correctly rejected.

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Issues: Whether refund of duty under Rule 173L of the Central Excise Rules, 1944 was admissible when the returned gaskets were not subjected to any of the stipulated processes before removal and were only repacked into gasket sets inside the factory.

Analysis: The returned goods were received within time and the prescribed intimation was given to the Department. However, the rule permits refund only when the manufactured excisable goods, after being returned, are taken up for being remade, refined, reconditioned or subjected to another similar process in the factory. On the facts found, the gaskets were removed as such on payment of duty and no process contemplated by the rule was undertaken before such removal. Repacking into sets, if any, occurred only after the goods had been removed on payment of duty. The condition precedent for refund under Rule 173L was therefore not satisfied.

Conclusion: Refund under Rule 173L was not admissible and the rejection of the refund claims was justified.

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