Refund under Rule 173L allowed for reprocessed defective goods despite loss of original identity, where procedural compliance was proved.

Refund under Rule 173L of the Central Excise Rules was admissible where duty-paid defective goods were returned for reprocessing, prior intimation was given, the goods were separately stored and properly accounted for, and the returned and reprocessed goods were of the same class. The Tribunal held that loss of original identity or inability to trace batch numbers was not decisive, because Rule 173L does not require the very same goods to be cleared after reprocessing without any change in identity. Compliance with the prescribed procedural requirements up to receipt and storage was sufficient, and the assessee was entitled to consequential relief.

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Issues: Whether refund under Rule 173L of the Central Excise Rules was admissible where defective goods were returned for reprocessing, duly intimated, separately stored and accounted for, but their original identity was not retained and the department disputed co-relation between the returned and reprocessed goods.

Analysis: Refund under Rule 173L is conditioned on return of duty-paid goods within the prescribed time, prior intimation, separate storage, and proper accounting of the goods and process in the prescribed records. The Tribunal applied earlier decisions holding that the Rule does not require the very same goods to be cleared after reprocessing without loss of identity, and that what is material is that the returned goods and the goods cleared after reprocessing are of the same class. It was found that the defective picture tubes had been duly intimated on return, separately stored, and accounted for in Form-V, and that the department did not dispute compliance with the procedural requirements up to receipt and storage. The objection that batch numbers or individual identity were not traceable was held not to be decisive, because identity preservation is not an essential criterion where the same class of goods is again cleared on duty after reprocessing.

Conclusion: Refund under Rule 173L was admissible, and the assessee was entitled to consequential relief.

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