Refund of duty-paid returned goods requires full examination of all relevant excise provisions and the rule against double duty.

A refund claim involving duty-paid goods returned to the factory and later used in manufacture must be examined on all relevant legal grounds, not confined narrowly to Rule 173H. The goods had been cleared on duty, returned under a verified D-3 declaration, and stated to have been captively consumed for another dutiable product. Because the authorities failed to consider other applicable provisions, including Rule 173L, and did not address the principle against double duty on the same goods, the rejection could not stand. The matter was remanded for fresh consideration after hearing the claimant and allowing further evidence.

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Issues: Whether the refund claim arising from returned duty-paid goods and their subsequent use in manufacture was liable to be examined only under Rule 173H of the Central Excise Rules, or whether all relevant provisions, including Rule 173L and the principle against double duty, had to be considered.

Analysis: The refund claim was rejected below on the narrow footing that Rule 173H applied and that the rule did not itself provide for refund. The records showed that the goods were originally cleared on payment of duty, later returned to the factory under a verified D-3 declaration, and were stated to have been used captively for manufacture of another dutiable product. The authorities below did not examine the claim in the light of all relevant provisions that may support refund, including Rule 173L, nor did they address the broader principle that the same goods should not suffer double duty. Since the claim was not considered from all relevant angles, the rejection could not be sustained.

Conclusion: The rejection was unsustainable and the matter was remanded for fresh examination of the refund claim after affording hearing and opportunity to adduce further evidence.

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