Rule 173-L refund claim fails where duty-paid goods are purchased from another manufacturer and further processed before export.

Rule 173-L of the Central Excise Rules, 1944 contemplates a return of duty-paid goods to the person from whom they were originally obtained, so ownership and reversion to that person are material. Starch purchased for value from another manufacturer, further processed, and then exported does not answer that description. The provision is therefore inapplicable where the goods are not returned to the original supplier or on its account. On that reasoning, the refund claim was held not maintainable and the issue was decided against the assessee.

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Issues: Whether starch purchased from another manufacturer, subjected to processing and exported, could be treated as a "return" of goods under Rule 173-L of the Central Excise Rules, 1944 so as to sustain refund of excise duty.

Analysis: Rule 173-L contemplates the return of goods on which duty has been paid, carrying an implied sense of taking back the goods to the person from whom they were originally obtained. The provision is not attracted where the goods were purchased for value from another manufacturer and then subjected to further processing before export. The element of ownership is material, and the return must be to or on account of the person from whom the goods were originally obtained.

Conclusion: The purchased starch did not constitute a "return" within Rule 173-L, and the refund claim was not maintainable. The issue is decided against the assessee and in favour of the Revenue.

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