Refund of excess excise duty cannot be denied merely because duty matched an approved declaration or buyers may have taken Modvat credit.

Refund of excess central excise duty could not be denied merely because the duty was paid at the rate stated in an approved declaration or classification list under Rule 173B. Where the applicable rate was lower and excess duty had been collected, prior approval of the declaration did not bar refund. Refund also could not be rejected on the footing that buyers may have taken Modvat credit; Section 11B did not permit refusal on that extraneous ground, and any such adjustment had to be pursued under Rule 57E. The rejection of refund was therefore unsustainable and the refund was directed to be granted according to law.

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Issues: (i) Whether refund could be denied on the ground that duty had been paid at the rate declared under Rule 173B of the Central Excise Rules, 1944. (ii) Whether refund could be denied on the ground that the buyers may have availed Modvat credit and the claimant had not proved otherwise.

Issue (i): Whether refund could be denied on the ground that duty had been paid at the rate declared under Rule 173B of the Central Excise Rules, 1944.

Analysis: Duty had been paid in excess because the applicable rate was lower than the rate actually applied. The prior approval of the declaration or classification list did not by itself bar refund where excess duty had in fact been collected. A refund claim cannot be rejected merely because payment was made according to the declared rate.

Conclusion: The denial of refund on this ground was not sustainable and was against the assessee.

Issue (ii): Whether refund could be denied on the ground that the buyers may have availed Modvat credit and the claimant had not proved otherwise.

Analysis: Section 11B of the Central Excises and Salt Act, 1944 did not permit refusal of refund on this basis. If the Revenue considered that credit had been taken by the buyers, the proper course was to proceed under Rule 57E of the Central Excise Rules, 1944. The refund claim could not be rejected on an extraneous ground that the buyers might have utilized Modvat credit.

Conclusion: The denial of refund on this ground was not sustainable and was against the assessee.

Final Conclusion: The order rejecting the refund was set aside and the proper officer was directed to grant the refund according to law.

Ratio Decidendi: Refund of excess excise duty cannot be denied merely because the duty was paid under an approved declaration or because the buyers may have taken Modvat credit, where the statutory scheme provides a specific refund or adjustment mechanism.

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