Refund under Rule 173L cannot be denied merely because returned goods were reprocessed alongside other raw material.

Rule 173L refund claims turn on whether returned duty-paid goods were received under proper intimation and properly accounted for in prescribed records. The rule does not require the returned goods to be reprocessed in a separate stream or without mixing with other non-duty-paid raw material. Where the records show receipt of the returned bottles, issue for reprocessing, and correlation between the returned quantity and the finished bottles cleared on payment of duty, the statutory requirement of accountal is satisfied. Rejection of the refund claim solely because reprocessing was not carried out separately was therefore unwarranted, and reconsideration of the claim with consequential relief was directed.

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Issues: Whether refund under Rule 173L could be rejected on the ground that the returned duty-paid goods were not reprocessed separately and were mixed with other non-duty-paid goods, despite receipt under intimation and recording in the prescribed records.

Analysis: The Rule required the returned goods to be received under proper intimation and accounted for in the prescribed record. It did not contain any stipulation that the returned goods must be reprocessed in a separate stream without addition of other raw material. The record showed receipt of the returned bottles, issue for reprocessing, and correlation between the returned quantity and the finished bottles cleared on payment of duty. On those facts, the statutory requirement of proper accountal stood complied with, and rejection of the claim solely because the reprocessing was not done separately was unwarranted.

Conclusion: The rejection of the refund claim on that sole ground was unjustified and the appeal was allowed with remand for reconsideration of the refund claim and consequential relief.

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