Refund of duty on returned defective goods cannot be denied merely because reprocessed goods were cleared after six months.

Rule 173L of the Central Excise Rules, 1944 did not require reprocessed defective goods to be cleared within six months of their receipt for refund of duty originally paid on the returned goods. The material condition was maintenance of accounts of the defective goods received back and the process applied to them, to the satisfaction of the jurisdictional Commissioner. As the Revenue's only objection was delayed re-clearance, and that was not a statutory requirement, the refund claim could not be rejected and the assessee was entitled to succeed.

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Issues: Whether refund of duty originally paid on defective goods returned by the buyer could be denied on the ground that the reprocessed goods were cleared to the buyer beyond six months from the date of receipt of the returned goods.

Analysis: Rule 173L of the Central Excise Rules, 1944 required the manufacturer to maintain an account of the defective goods received back and the process applied to them, to the satisfaction of the jurisdictional Commissioner. The Rule did not prescribe that the reprocessed goods must be cleared within six months from the date of receipt of the defective goods. The only objection taken by the Revenue was the alleged delay in re-clearance, which was not a condition under the Rule.

Conclusion: The refund claim could not be rejected on the ground of clearance beyond six months, and the assessee was entitled to succeed.

Ratio Decidendi: Rule 173L does not require reprocessed defective goods to be cleared within six months of receipt for refund of duty originally paid; compliance with the accounting requirement is the material condition.

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