Refund of investigation payments follows when clandestine removal is not proved and no duty demand survives

Amounts paid during investigation toward alleged duty on suspected suppression of production are refundable where the underlying allegation of clandestine removal is not sustained in appeal and no duty demand survives. The payment cannot be retained as duty once it is found that no duty was ultimately payable. On that basis, refund was held admissible to the assessee.

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Issues: Whether the amount paid during investigation, after the allegation of suppression of production was not upheld and no duty demand survived, was refundable to the assessee.

Analysis: The amount in dispute was paid during the course of investigation into alleged suppression of production of excisable goods. The allegation of clandestine removal was not sustained in appeal, and the duty demand consequently did not survive. Where no duty is ultimately found payable, the amount collected during investigation cannot be retained as duty and is to be treated as refundable.

Conclusion: The refund was admissible to the assessee.

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