Refund on re-conditioned goods allowed only to the extent of duty actually paid at final clearance.

Refund of duty on chassis cleared for defence use was admissible once the requisite certificate under Notification No. 263/87 was produced by the competent authority, and the fact that the certificate referred to the chassis did not defeat the claim where the goods were sent back for engine replacement. However, refund under Rule 173L was confined to the duty actually paid on the goods after re-making or re-conditioning, so the claim could not exceed that amount. The claim was also within the limitation period under Section 11B, and refund was therefore available only to the extent of duty paid on the engine at the final clearance after re-conditioning.

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Issues: Whether refund of duty on chassis cleared to DRDL was admissible on production of the requisite certificate, and whether the refund was limited to the duty paid on the goods after being re-made or re-conditioned.

Analysis: The chassis was cleared for defence use and the certificate required by Notification No. 263/87 was later produced by the competent authority. The fact that the certificate referred to the chassis did not defeat the claim, since the goods had been sent back for replacement of the engine and the chassis formed the relevant article cleared for defence purposes. At the same time, refund under Rule 173L could not exceed the duty actually paid on the goods after re-making or re-conditioning, and the refund claim had to be confined accordingly. The claim was also within the time-limit under Section 11B.

Conclusion: Refund was admissible, but only to the extent of the duty paid on the engine at the time of the final clearance after re-conditioning.

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