Strict compliance with exemption conditions governs refund claims where duty was paid under an unchallenged classification list.

Exemption under Notification No. 115/86-CE was available only on strict compliance with its prescribed conditions, including maintaining the required charge-wise account and exercising the specified option for computing exemption. Because those conditions were not met, refund was not available. A refund claim was also not maintainable where duty had been paid on the basis of an approved classification list that had never been challenged, since the basis of payment itself remained undisturbed. The sanctioned refund was therefore recoverable, and the appeal failed.

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Issues: (i) Whether the appellants were entitled to refund under Notification No. 115/86-CE despite not maintaining charge-wise account of the specified oil and not exercising the prescribed option. (ii) Whether a refund claim was maintainable when duty had been paid in accordance with an approved classification list without any challenge to that approval.

Issue (i): Whether the appellants were entitled to refund under Notification No. 115/86-CE despite not maintaining charge-wise account of the specified oil and not exercising the prescribed option.

Analysis: The exemption notification required the percentage of cotton seed oil or specified minor oils to be computed with reference to the weight of such oils and the total weight of the mixture immediately before hydrogenation. It also required the option for computation of exemption to be exercised either on an individual charge basis or on a monthly basis. The appellants had not maintained the required charge-wise account and had not exercised the prescribed option. In exemption matters, the benefit is available only on strict fulfilment of the conditions laid down in the notification.

Conclusion: The appellants were not entitled to the refund under the notification.

Issue (ii): Whether a refund claim was maintainable when duty had been paid in accordance with an approved classification list without any challenge to that approval.

Analysis: The duty had been paid on the basis of an approved classification list, and no appeal or challenge had been made against that approval. A subsequent refund claim, without first assailing the basis on which duty was paid, was not maintainable.

Conclusion: The refund claim was not admissible on this ground as well.

Final Conclusion: The recovery of the sanctioned refund was upheld and the appeal failed.

Ratio Decidendi: Exemption notifications granting fiscal benefits must be strictly complied with, and a refund cannot be claimed where the prescribed conditions are not fulfilled or where the duty was paid on an unchallenged approved classification basis.

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