Refund on remade defective goods allowed where Rule 173L procedure was complied with and no proof supported the scrap allegation.

Refund of duty on defective goods returned for remaking was treated as admissible under Rule 173L where the prescribed D-3 intimation, officer verification, account maintenance, re-manufacture, and fresh duty payment on the re-made goods were established. The Revenue's objection that the returned goods had been scrapped and that the re-made goods were of a different class failed because no supporting evidence was produced. The commentary also notes that Rule 49 was not relevant to the refund issue under Rule 173L. On that basis, the assessee's appeal was sustained and the Revenue's challenge failed.

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Issues: Whether refund of duty on returned defective goods was admissible under Rule 173L of the Central Excise Rules, 1944 when the goods were received back for remaking, the prescribed intimation and verification procedure was followed, duty was paid again on the re-made goods, and the Revenue alleged that the returned goods had been scrapped and were not of the same class as the re-made goods.

Analysis: The returned goods were defective plastic furniture sent back for remaking, not scrap. The undisputed record showed timely D-3 intimation, verification by the proper officer, maintenance of accounts, re-manufacture, and subsequent clearance on payment of duty. The Revenue produced no evidence to establish that the returned goods and the re-made goods were of different classes. The decisions cited supported the view that goods returned for repair or remaking continue to satisfy the statutory requirement where the factual and procedural conditions are met. The reliance on Rule 49 was found irrelevant to the refund question under Rule 173L.

Conclusion: The refund claim was admissible and the Revenue's challenge failed.

Final Conclusion: The order allowing the assessee's appeals was upheld, and the Revenue's appeals were rejected as without merit.

Ratio Decidendi: Where duty-paid goods are returned as defective goods for remaking and the statutory procedure under Rule 173L is complied with, refund cannot be denied merely on a bare allegation that the goods were scrapped or that the re-made goods are of a different class without supporting evidence.

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