Rule 173L refund cannot be denied for export under bond; the key test is whether refund exceeds duty payable.

Refund under Rule 173L of the Central Excise Rules, 1944 cannot be denied merely because returned goods were exported under bond without payment of duty, since export clearance under bond is not the same as removal without duty and cannot be treated as clearance at nil duty. The proper inquiry is whether the refund claimed exceeds the duty payable on the reprocessed goods. The article also notes that rejection cannot rest on a ground not stated in the show cause notice. On the stated facts, the duty leviable on the exported goods was higher than the refund claimed, so the claim was not liable to rejection on those grounds.

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Issues: Whether refund under Rule 173L of the Central Excise Rules, 1944 could be denied on the ground that the returned goods were exported under bond without payment of duty and whether the refund claimed exceeded the duty payable on the reprocessed goods.

Analysis: The original authority relied on a ground not reflected in the show cause notice, which could not sustain the rejection. On the remaining ground, clearance of goods for export under bond without payment of duty is not the same as removal without duty. Such export clearance cannot be treated as clearance at nil duty. The relevant inquiry is whether the refund claimed exceeds the duty payable on the subsequent clearance, and on the facts the duty leviable on the exported goods was higher than the amount originally claimed as refund.

Conclusion: The refund claim was not liable to be rejected on the stated grounds and the appeal succeeded in favour of the assessee.

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