Excise duty refund governed by amended refund rules, with proof of non-passing on and Consumer Welfare Fund credit required.

Refund of excise duty had to be determined under the governing statutory framework in force, including the Full Bench interpretation of the Explanation to Section 4(4)(d)(ii). The assessing authority was required to apply that binding construction while fixing the refundable amount, if any. The amended Section 11B also applied, so refund was available only on proof that the incidence of duty had not been passed on, and any amount found refundable had to be credited to the Consumer Welfare Fund. The refund order was therefore modified to reflect these statutory requirements.

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Issues: (i) Whether the refund claim had to be determined in the light of the Full Bench decision construing the Explanation to Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944; (ii) Whether the amended Section 11B applied to the refund, requiring proof that the incidence of duty had not been passed on and, if refundable, credit of the amount to the Consumer Welfare Fund.

Issue (i): Whether the refund claim had to be determined in the light of the Full Bench decision construing the Explanation to Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944.

Analysis: The subsequent Full Bench ruling governing the interpretation of the Explanation to Section 4(4)(d)(ii) was accepted as binding for determining the quantum of refund. The assessing authority was required to take that ruling into account while deciding the amount, if any, refundable.

Conclusion: The refund determination had to conform to the Full Bench interpretation of Section 4(4)(d)(ii).

Issue (ii): Whether the amended Section 11B applied to the refund, requiring proof that the incidence of duty had not been passed on and, if refundable, credit of the amount to the Consumer Welfare Fund.

Analysis: The amended refund provisions introduced a statutory bar against refund unless the applicant established that the duty incidence had not been passed on. They further required the authority, upon being satisfied that any amount was refundable, to make the order accordingly and credit the amount to the Consumer Welfare Fund created under the Act and to be utilised for consumer welfare. The order under appeal could therefore operate only subject to these provisions.

Conclusion: The refund was subject to the amended Section 11B regime, including the requirement of proof of non-passing of incidence and credit to the Consumer Welfare Fund.

Final Conclusion: The refund order was modified to reflect the governing statutory changes, and the appeal succeeded to that extent.

Ratio Decidendi: A refund of excise duty is controlled by the statutory refund framework in force at the time of decision, including the bar against refund where the duty incidence has been passed on and the mandatory credit of refundable amounts to the Consumer Welfare Fund.

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