Rule 173L refund claims survive where remixing returned goods with fresh material is not shown to be prohibited and evidence is lacking.

Remixing returned excisable goods with fresh material did not, on the Tribunal's reasoning, fall outside Rule 173L where no express or implied prohibition was shown. The Revenue's objection that refund should fail because the returned goods allegedly had no commercial value also failed, as that assertion was unsupported by evidence and the record did not establish that the reprocessed quantity exceeded the original clearances. The Tribunal reiterated that, in the absence of proof to the contrary, and where the appellate order already contained the conditional Modvat credit reversal, the refund relief could not be denied.

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Issues: (i) Whether remixing the returned goods with fresh material amounted to a process excluded by Rule 173L of the Central Excise Rules. (ii) Whether the refund claim could be denied on the basis that the returned goods had no commercial value and that no supporting material was produced.

Issue (i): Whether remixing the returned goods with fresh material amounted to a process excluded by Rule 173L of the Central Excise Rules.

Analysis: The Tribunal noted that in the assessee's own earlier matters on identical facts, it had already been held that remixing fresh material with damaged returned goods was not prohibited by any express or implied provision of Rule 173L. The same approach was followed here, and no contrary material was shown to justify a different view.

Conclusion: The process of remixing did not take the claim outside Rule 173L, and the objection was rejected.

Issue (ii): Whether the refund claim could be denied on the basis that the returned goods had no commercial value and that no supporting material was produced.

Analysis: The Tribunal observed that the same contention had already been rejected in the assessee's earlier cases for want of evidence. In the present appeals also, the Revenue relied only on assertions in the grounds of appeal, with nothing on record to establish that the returned goods had no commercial value or that the reprocessed quantity was greater than the original clearances. The conditional direction to reverse the Modvat credit was already contained in the appellate order.

Conclusion: The objection based on alleged absence of commercial value was not proved and could not defeat the refund claims.

Final Conclusion: The Revenue failed to make out any ground to interfere with the appellate order, and the refund relief in favour of the assessee was sustained.

Ratio Decidendi: Where returned excisable goods are remixed with fresh material and the Revenue does not establish, by evidence, that such treatment falls outside Rule 173L or that the returned goods lacked commercial value, refund cannot be denied.

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