Duty payable under Rule 173L means duty actually paid, limiting refund where reprocessed goods clear at nil rate.

Under proviso (iv) to Rule 173L of the Central Excise Rules, 1944, the expression "duty payable" was construed to mean the duty actually paid on the re-made or re-conditioned goods, not the notional tariff duty that might otherwise have been leviable. Applying that interpretation, the Tribunal held that where the reprocessed goods were cleared at nil rate under an exemption notification, refund could not exceed the duty actually paid. The earlier decision dealing with export under AR-3 was distinguished on facts and treated as inapplicable. The view limiting refund to the duty actually paid was upheld.

---

---

Issues: Whether, under proviso (iv) to Rule 173L of the Central Excise Rules, 1944, the expression "duty payable" refers to the duty actually paid on re-made or re-conditioned goods, or to the duty leviable at tariff rate, and whether the refund in such cases can exceed the duty actually paid where the goods are cleared at nil rate under an exemption notification.

Analysis: The expression "payable" in the proviso was construed in the context of levy and collection under the excise law. The Tribunal relied on the interpretation accepted by the Delhi High Court, namely that "payable" in this setting means what is lawfully paid, not the notional tariff duty that could have been levied absent exemption. Since the re-processed goods were cleared at nil rate under an exemption notification, the refund could not exceed the duty actually paid. The earlier decision allowing refund in a case involving export under AR-3 was distinguished on facts and held not applicable.

Conclusion: The expression "duty payable" in proviso (iv) to Rule 173L of the Central Excise Rules, 1944 means the duty actually paid, and the assessee was not entitled to refund on the basis of tariff duty. The view restricting refund to the duty actually paid was upheld, and the appeal was allowed.

---