Refund on returned excisable goods includes waste from reprocessing; later amendment did not apply retrospectively.

The refund provision for excisable goods returned to a factory for remaking, refining, reconditioning or similar processing was construed to cover duty already paid on the returned goods themselves. Waste generated during reprocessing did not bar refund, because the rule was not conditioned on the entire output being free from loss or waste. The provision and its provisos were read as focusing on the returned goods and their use in producing goods of the same class. An amendment later relied on by the department was held inapplicable to the earlier period in dispute because it was not retrospective.

---

---

Issues: Whether, under the refund provision governing excisable goods returned to a factory for reprocessing, the assessee was entitled to refund of duty on the entire quantity of returned goods, including the quantity that turned into waste during reprocessing.

Analysis: The governing rule provided refund of duty paid on manufactured excisable goods that were returned for being remade, refined, reconditioned or subjected to a similar process. The decisive words were those referring to the duty already paid on the returned goods themselves. The provision and its provisos were read as addressing the returned goods and the requirement that they be used for producing goods of the same class. The waste generated during the process was held not to defeat the refund, because the rule did not make refund contingent on the entire reprocessing output being exempt from loss or waste. The later amendment relied on by the department was held inapplicable because the dispute related to an earlier period and the amendment was not retrospective.

Conclusion: The assessee was entitled to refund of the entire duty paid on the returned goods, and the restriction applied by the department was unsustainable.

---