Refund of excise registration deposit upheld where no manufacture or clearance of excisable goods was proved.

A deposit made at the time of central excise registration for Pan Masala remained refundable because no evidence showed that excisable goods were manufactured or cleared. The assessee installed machinery but never commenced production and later surrendered the licence; mere installation of machinery was insufficient to infer manufacture. The departmental challenge failed because the Board circular relied upon was held irrelevant on these facts, and the refund granted by the Commissioner (Appeals) was upheld as justified.

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Issues: Whether the amount deposited by the assessee at the time of taking central excise registration for manufacture of Pan Masala was refundable when there was no evidence that any excisable goods were manufactured or cleared.

Analysis: The deposit was made at the stage of registration, but the assessee never commenced production after installation of machinery and later surrendered the licence. The revenue did not adduce any evidence to show that excisable goods were manufactured or cleared. Mere installation of machinery could not, by itself, justify an inference of manufacture. In these circumstances, the refund granted by the Commissioner (Appeals) was found to be justified, and the Board circular relied upon by the department was held to be irrelevant to the facts.

Conclusion: The refund was admissible and the departmental challenge failed.

Ratio Decidendi: A deposit made at the stage of excise registration remains refundable where the department fails to prove actual manufacture or clearance of excisable goods.

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