Rule 173L refund cannot be denied merely for mixing returned goods during reprocessing if statutory conditions are met.

Refund under Rule 173L of the Central Excise Rules cannot be denied merely because returned goods were mixed with other materials during reprocessing or because a strict 1:1 correlation was not maintained. The rule requires separate accounts of returned goods and the process applied, but it does not insist on a separate manufacturing process or exact matching between returned inputs and reprocessed output. The material considerations are whether the returned goods were reprocessed, whether the resulting goods are of the same class, and whether the other statutory conditions are satisfied. On that basis, mixing at the reprocessing stage alone does not defeat the refund claim.

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Issues: Whether refund under Rule 173L of the Central Excise Rules could be denied merely because the returned goods were mixed with other goods during reprocessing and no separate 1:1 correlation was maintained.

Analysis: Rule 173L requires separate accounts of returned goods and the process to which they are subjected, but it does not insist on a separate manufacturing process or a strict 1:1 correlation between the returned goods and the reprocessed output. The material consideration is whether the returned goods were reprocessed and whether the goods emerging after reprocessing are of the same class, along with compliance with the other conditions of the rule. Mixing the returned goods with other raw materials during the reprocessing stage, by itself, does not defeat the claim for refund.

Conclusion: The refund claim could not be rejected solely on the ground of mixing during reprocessing or absence of exact correlation; the issue was decided in favour of the assessee.

Ratio Decidendi: Refund under Rule 173L cannot be denied merely because returned goods are mixed with other materials during reprocessing, so long as the statutory conditions are otherwise satisfied and the goods produced are of the same class.

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