Rule 173L refund admissible for returned excisable goods reprocessed and later cleared at nil duty.

Rule 173L permits refund of duty on excisable goods returned to the factory for remaking, refining, reconditioning or similar processing. The proviso limits the refund by reference to the duty payable on the reprocessed goods, but it does not require those goods to be actually cleared on payment of duty. Where the original goods were duty paid, were duly returned for reprocessing, and the refund claimed did not exceed the duty attributable to the reprocessed goods, the refund was admissible. The claim therefore succeeded on the statutory conditions being satisfied, even though the reprocessed goods were later cleared at nil duty.

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Issues: Whether refund of duty paid was admissible under Rule 173L when excisable goods initially cleared on payment of duty were returned for reprocessing and the reprocessed goods were later cleared at nil rate of duty.

Analysis: Rule 173L permits refund of duty paid on manufactured excisable goods returned to the factory for being remade, refined, reconditioned or subjected to a similar process. The limitation in the proviso operates only to cap the refund by reference to the duty payable on the reprocessed goods; it does not require that the reprocessed goods must actually be cleared on payment of duty. Since the goods originally removed were duty paid, the return and reprocessing procedure had been complied with, and the refund claimed did not exceed the duty payable on the reprocessed goods, the rule applied.

Conclusion: The refund claim was admissible and the appeal failed, in favour of the assessee.

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