Category-wise refund computation under an exemption notification was upheld, with refund quantification sent back for verification.

Annual differential refund under the exemption notification had to be computed product-wise and category-wise, because the scheme granted exemption and monthly refund on that basis and did not indicate any different annual formula. An aggregated computation across commodities was inconsistent with the notification's structure, since it could permit refund in one category to exceed the duty payable on value addition for that category. The category-wise method was therefore affirmed in principle, while the refund quantification required verification by the original adjudicating authority.

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Issues: Whether the annual differential refund under the exemption notification was to be computed by aggregating all commodities together or category-wise product-wise, and whether the matter required re-examination of the refund calculation.

Analysis: The notification granted exemption and refund with reference to excisable goods product-wise and category-wise, and the monthly refund was also sanctioned on that basis. The annual differential refund clause did not provide for a different mode of computation. Accepting the appellant's aggregated method would allow the refund for at least one category of goods to exceed the duty payable on value addition for that category, which would be inconsistent with the scheme of the notification. At the same time, the dispute involved the detailed quantification of the refund.

Conclusion: The category-wise method of computation was upheld in principle, but the matter was sent back to the original adjudicating authority for verification of the calculation aspect.

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