Compounded levy payments for khandsari sugar treated as refundable deposit, outside excise refund limitation.

Amounts paid initially under the compounded levy scheme for khandsari sugar were treated as a deposit because Rule 92B required advance payment and then weekly payments in discharge of duty liability. The additional initial amount was not regarded as duty paid for a particular period, so the statutory refund limitation for excise duty did not apply. The amount was therefore refundable as a deposit and not barred under the refund provisions.

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Issues: Whether the amount paid under the compounded levy scheme for khandsari sugar was a refundable deposit and not duty of excise, so that refund was not barred under the refund provisions.

Analysis: Rule 92B of the Central Excise Rules, 1944 contemplated payment of a sum in full discharge of duty liability on production of khandsari sugar, but the scheme also required initial payment in advance and weekly payments thereafter. The additional amount paid initially therefore assumed the character of a deposit. Since it was not a duty payment for a particular week, its refund was not governed by Section 11B of the Central Excises and Salt Act, 1944.

Conclusion: The amount was refundable as a deposit and not barred by the limitation applicable to refund of excise duty.

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