Refund of excise duty paid under protest cannot be denied merely on assumed passing-on of duty to buyers.

Central excise duty paid under protest after exemption was not allowed at the time of clearance could not be denied as refund merely on an assumed passing-on of the duty to buyers. The text states that there was no legal basis to refuse restitution on the footing of alleged double recovery to the exchequer where the assessee had been compelled to clear the goods on payment of duty. Refund was therefore maintainable, unless a specific legal provision authorized denial on such a ground.

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Issues: Whether refund of central excise duty paid under protest could be denied on the ground that the benefit of the exemption notification was not availed at the time of clearance and that the duty had allegedly been recovered from buyers.

Analysis: The duty was paid because exemption was not granted at the time of removal, and the payment was made under protest. There was no legal basis shown for rejecting the refund merely because the department assumed that the duty had been passed on. The asserted double payment to the exchequer was not a valid ground to refuse restitution of duty paid in excess when the assessee had been compelled to clear the goods on payment of duty.

Conclusion: Refund could not be denied on the stated grounds, and the assessee was entitled to refund.

Ratio Decidendi: Where excise duty is paid under protest because exemption was not allowed at clearance, refund cannot be refused merely on an assumed passing on of duty unless the law specifically permits such denial.

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