Refund under Rule 156B fails when duty was paid under an unmodified demand order and re-warehousing proof came later.

Refund under Rule 156B of the Central Excise Rules, 1944 was unavailable where duty on clearances of reduced crude oil had been paid pursuant to a confirmed demand order under Rule 9(2) read with Section 11A, and the re-warehousing certificate was produced only later. The duty had been demanded because the Chapter X re-warehousing requirement was not met within time, and that demand remained unmodified. Rule 156B could not be used to bypass a subsisting demand order; refund could arise only if the demand was first modified or set aside.

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Issues: Whether refund of duty paid on clearances of Reduced Crude Oil was admissible under Rule 156B of the Central Excise Rules, 1944 when the duty had been paid pursuant to an unmodified demand order and the re-warehousing certificate was produced later.

Analysis: The clearances were made at concessional rate under Notification No. 75/84 and the goods were required to satisfy the Chapter X re-warehousing procedure. Since re-warehousing certificates were not produced within time, duty was demanded under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944, and the demand was confirmed by a separate adjudication order. The duty was paid in consequence of that demand order. The later refund claim could succeed only if that demand order was modified or set aside. Rule 156B could not be invoked to bypass the confirmed demand, because the duty was not paid under that refund mechanism.

Conclusion: Refund was not admissible under Rule 156B, and the refusal to grant refund was in law.

Ratio Decidendi: Refund under Rule 156B of the Central Excise Rules, 1944 is available only where duty is paid under that procedural framework and cannot be granted against duty paid pursuant to an unchallenged or unmodified demand order.

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