Rule 173L refund upheld where reprocessed returned goods were cleared on duty and no revenue loss arose.

Rule 173L refund was available for excisable goods returned to the factory for remaking, refining, reconditioning or similar processing, provided the reprocessed goods were again cleared on payment of duty. The objection that replacement materials were cleared before re-processing was completed did not justify denial of refund where the returned goods were in fact reprocessed and cleared on duty, and the duty paid on the replacement goods matched the duty on the later cleared reprocessed goods. The alleged non-compliance with sub-rule (3) caused no revenue loss and did not affect the refund already sanctioned.

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Issues: Whether refund under Rule 173L could be denied on the ground that replacement materials were cleared before re-processing was completed, and whether non-compliance with sub-rule (3) was made out.

Analysis: Rule 173L contemplates refund in respect of excisable goods returned to the factory for being remade, refined, reconditioned, or subjected to a similar process. The safeguard in the rule is directed to ensuring that the reprocessed goods are again cleared on payment of duty. On the facts found, the returned goods were reprocessed and cleared on payment of duty, and there was no difference in the quantum of duty paid on the replacement goods and the subsequently cleared reprocessed goods. The objection therefore did not affect the refund already sanctioned and raised no revenue implication.

Conclusion: The reference application was rejected, and the refund sanctioned under Rule 173L was upheld.

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