Rule 173H reconditioning fails where duty-paid goods are converted into a commercially different product through processing.

Rule 173H allows duty-paid goods to be returned for remaking, refining, reconditioning or repairing only where the process does not amount to manufacture and the goods remain in the same form. Reworking a lathe machine by removing and detaching attachments and tail stock and increasing the centre height changed its model, form and functional character, producing a commercially different machine. That process was therefore manufacture, not mere reconditioning, so the Rule 173H benefit was unavailable and the refund claim failed.

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Issues: Whether conversion of a duty-paid lathe machine from Model HD-50B/1000 mm to Model SB-65/1000 mm after reconditioning fell within Rule 173H or amounted to manufacture, so as to entitle the appellant to refund.

Analysis: Rule 173H permits duty-paid goods to be brought back into the factory for remaking, refining, reconditioning or repairing, provided the process does not amount to manufacture and the goods are removed in the same form. The machine brought back by the appellant was altered by removing and detaching attachments and tail stock and by increasing the centre height, resulting in a different model capable of different functions. Those operations were not mere repair or reconditioning, but brought into existence a commercially different product. The cited authorities on double levy and processing of goods were distinguishable because they did not concern a case where the goods ceased to remain in the same form after the process under Rule 173H.

Conclusion: The conversion amounted to manufacture and the benefit of Rule 173H was not available; the refund claim was not admissible.

Ratio Decidendi: Where duty-paid goods brought back under Rule 173H are subjected to processing that changes their form, identity, or functional character so as to produce a commercially different product, the process amounts to manufacture and the exemption from duty under Rule 173H is unavailable.

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