Strict construction of excise refund notification denied relief where duty payment on the very supplied goods was not substantiated.

Refund of basic excise duty was denied on HSD allegedly supplied to an eligible organisation under Notification No. 108/1995 because the records did not show that the duty sought to be refunded had actually been paid on the very goods supplied. The goods were kept in a common bonded tank and only notionally separated in the ERP system, but the ER-1 returns and supporting documents did not reflect them as the appellant's manufactured clearances. The exemption notification was construed strictly, and no express coverage was found for a trader who purchases duty-paid goods from another manufacturer and supplies them onward to an eligible recipient. The refund rejection was therefore upheld.

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Issues: Whether refund of basic excise duty was admissible on HSD allegedly supplied to an eligible organisation under Notification No. 108/1995 dated 28.08.1995, and whether the appellant could claim the benefit when the goods reflected in its refund claim were not shown as duty-paid goods manufactured by it in the records.

Analysis: The goods were kept in a common bonded tank and were only notionally separated in the ERP system. The refund application was rejected because the documents and ER-1 returns did not substantiate that the duty sought to be refunded had actually been paid on the very goods supplied to the eligible recipient. The claimed goods were found not to have been reflected as the appellant's manufactured clearances. The exemption notification was construed strictly, and it was held that there was no express coverage for a trader who purchases duty-paid goods from another manufacturer and supplies them onwards to an eligible recipient. The authorities relied on by the appellant were distinguished because they concerned refunds claimed by the eligible recipient itself. The alternative plea that refund could be claimed in respect of goods said to have been purchased from another manufacturer also failed because the claim in the application was not for duty paid by that manufacturer.

Conclusion: The refund claim was not admissible, and the rejection of the claim was upheld against the assessee.

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