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Issues: (i) Whether the purchasers of naphtha, who had paid a price inclusive of duty to the seller, had locus standi to claim refund of excise duty under Section 11B. (ii) Whether the refund claim was maintainable before the Assistant Commissioner having jurisdiction over the purchasers' factory instead of the authority having jurisdiction over the refinery where duty was originally paid.
Issue (i): Whether the purchasers of naphtha, who had paid a price inclusive of duty to the seller, had locus standi to claim refund of excise duty under Section 11B.
Analysis: Refund under Section 11B is available to any person only if that person establishes that the duty was collected from him or paid by him to the Government. Excise duty is payable by the manufacturer at the stage of clearance, and the refund mechanism operates against the duty-paying documents and the assessment of the goods at the manufacturing stage. A purchaser who merely pays a price inclusive of duty to the seller does not thereby become the person who paid excise duty to the Government. The right to claim refund therefore belongs to the refinery that paid the duty, not to the subsequent purchaser.
Conclusion: The purchasers had no locus standi to claim refund of the alleged excess excise duty.
Issue (ii): Whether the refund claim was maintainable before the Assistant Commissioner having jurisdiction over the purchasers' factory instead of the authority having jurisdiction over the refinery where duty was originally paid.
Analysis: The refund claim had to be examined with reference to the place where the duty was originally paid and the authority competent to reassess that payment. Since the alleged excess duty was paid by the refinery, the jurisdictional Central Excise authority over the refinery alone could determine the excess payment, the eligibility for refund, and allied matters such as limitation and unjust enrichment. The authority over the purchasers' factory had no jurisdiction to re-open the refinery's duty payment or sanction refund on the basis of documents not pertaining to the purchasers' own duty payment.
Conclusion: The refund claim was not maintainable before the authority having jurisdiction over the purchasers' factory.
Final Conclusion: The appeal failed because the refund claim was filed before a wrong authority and was made by persons who had not paid the excise duty to the Government.
Ratio Decidendi: A refund of excise duty under Section 11B can be claimed only by the person who has actually paid the duty to the Government, and the claim must be made before the jurisdictional authority competent over that duty payment.
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