Refund on returned goods under Rule 173L allowed where duty was paid on both original clearance and re-clearance.

Refund of duty on returned goods was admissible under Rule 173L where the goods were received back from customers, timely D-3 intimation and record entries were made, and the same goods were subsequently re-cleared on payment of duty after testing. The requirement of separate processing was not treated as decisive once the essential conditions of the rule were established. As duty had already been paid on the first clearance and again on re-clearance of the same goods, the claim could not be rejected in a manner that would burden the goods twice. The refund claim was therefore allowed.

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Issues: Whether refund of duty paid on returned goods was admissible under Rule 173L of the Central Excise Rules, 1944 when the goods were received back from customers, D-3 intimation was filed, and the goods were again cleared on payment of duty after testing.

Analysis: The return of the goods to the factory was supported by timely D-3 intimation and corresponding entries in the records. The later re-clearance of the same goods on payment of duty was also not in dispute. The requirement that the returned goods should undergo separate processing was not treated as decisive where the essential facts for Rule 173L were established. Since duty had been paid at the time of first clearance and again at the time of subsequent clearance of the same goods, the demand could not be sustained so as to burden the same goods twice.

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

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