On June 16, 2022, about 0915 central daylight time, a Bellanca 17-30A, N39880, was substantially damaged when it was involved in an accident at Bruce Campbell Field Airport (MBO), Madison, Mississippi. The pilot and passenger were not injured. The airplane was operated as a Title 14 Code of Federal Regulations Part 91 personal flight. After departing from MBO, the pilot noticed smoke in the cabin and returned to land. While taxiing, the smoke worsened, and the pilot stopped the airplane and shut down the engine. The pilot and passenger egressed and observed a fire on the right side of the engine compartment. The passenger used a fire extinguisher but was not able to stop the fire. The fire department arrived and extinguished the fire. The airplane sustained substantial damage to the forward fuselage. Postaccident examination revealed the right-side exhaust system was fractured between the muffler and tailpipe. The muffler and tailpipe assemblies were sent to the National Transportation Safety Board Materials Laboratory, which determined that the aft ball tube (part of the muffler assembly) had separated from the muffler body and remained attached to the tailpipe. The outer surface of the ball tube exhibited rubbing in the regions where it lapped the tailpipe clamping assembly and the muffler. The forward end of the ball tube was found to have cut back material in one region and raised up material in another region, with both regions exhibiting rubbing features. The features on the ball tube were consistent with failure of a repair weld. Areas of the ball tube had a gray and/or red appearance, which was consistent of an oxide film that formed from repeated exposure to hot exhaust gases. In 2007, Alexandria Aircraft, the holder of the Bellanca 17-30A type certificate, issued a service letter, B-110, regarding inspection of the 17-30A exhaust system (which also applied to other Bellanca models). Subsequently, the Federal Aviation Administration (FAA) issued an AD 2008-05-11, which made the service letter a mandatory requirement. The service letter requires the inspection of the weld joints of the muffler for cracks. The first inspection is within 25 hours, with recurring inspections every 50 hours. If/when a crack is found, the owner has three options for remediation: 1) Replace the muffler and tailpipe assemblies with new, redesigned parts. 2) Send the muffler and tailpipe assemblies to Bellanca/AALLC FAA Repair Station BNXR512X for reconditioning, which results in a functionally similar part as the new, redesigned parts. 3) “Recondition or repair the defective left and/or right muffler and tailpipe assembly(ies) to their original configuration using FAA approved methods and materials. See FAA Advisory Circular 43.13-1: Acceptable Methods, Techniques and Practices – Aircraft Inspection and Repair.” A maintenance record of the weld repair was not available to the investigation. Maintenance records show that AD-2008-05-11 was complied with at the last annual inspection dated May 20, 2022, at an aircraft total time of 2543.5 hours. According to the owner, the accident occurred about 10 flight hours following the annual inspection. The mechanic who performed the last annual inspection stated that he hadn’t noticed anything that “stuck out” with the exhaust system. He was familiar with the accident and remarked that it was very difficult to view the location where the fracture occurred. He reported he didn’t used a borescope to assist viewing internal welds and was not familiar with the service letter requirement to spray the outside of the muffler with a penetrating oil to assist with identifying cracks. The Alexandria Aircraft Service Letter B-110 inspection includes the following procedure: Spray the outside of the muffler at the riser and ball joint attachment welds with a penetrating oil. If there is a crack around the riser or the ball joint the penetrating oil will quickly move thru crack and a wet spot will appear inside the muffler.