Refund of excise duty on molasses storage rejected where duty was correctly paid at the time of storage

Rule 51(A) of the Central Excise Rules, 1944 allowed storage of duty-paid goods with departmental permission on payment of appropriate duty, and the duty on molasses stored in kutcha pits was paid at the rate prevailing when storage took place. The later difference between the duty-paid value and the eventual sale price did not show any excess or mistaken payment of central excise duty. On that basis, refund was not admissible and the claim was rightly rejected.

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Issues: Whether refund of central excise duty was admissible when molasses were stored in kutcha pits with departmental permission and duty had been paid at the rate prevailing at the time of storage.

Analysis: Rule 51(A) of the Central Excise Rules, 1944 prohibited retention of duty-paid goods in factory premises but permitted storage on payment of appropriate central excise duty. The duty was paid before storage and at the rate applicable at the relevant time, namely when the molasses were stored in the kutcha pits. A later difference between the duty-paid value and the subsequent sale price did not affect the correctness of the duty payment made at the time of storage, and therefore did not create any refundable excess.

Conclusion: Refund was not admissible and the claim was rightly rejected.

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