Refund of excess excise duty cannot be recovered from the assessee merely because buyers took Modvat credit.

Refund of excess central excise duty lawfully granted to an assessee could not be recovered under Section 11A merely because purchasers had taken Modvat credit of the excess duty. The taking of credit by buyers was treated as a separate event at the consignee's end, and any excess credit had to be addressed independently under Rule 57E. The assessee was not required to ensure reversal of credit taken by buyers, and a possible revenue loss on that account did not justify recovery of the refunded amount from the assessee.

---

---

Issues: Whether refund of excess central excise duty paid by the assessee could be recovered under Section 11A merely because buyers of the goods had taken Modvat credit of the excess duty amount.

Analysis: The excess duty payment by the assessee was admitted, and the refund had been granted under Section 11B. The taking of Modvat credit by the purchasers was treated as a matter arising at the buyers' end and as a separate legal event. If any excess credit had to be reversed, action could be taken against the consignees under Rule 57E. The assessee was not responsible for ensuring reversal of credit taken by buyers, and Section 11A could not be used to recover the refunded amount on the ground of a possible revenue loss.

Conclusion: Recovery of the refunded excess duty from the assessee under Section 11A was not justified; the issue was decided in favour of the assessee.

Ratio Decidendi: A refund of excess duty lawfully granted to the assessee cannot be recovered from it under Section 11A merely because buyers have taken Modvat credit; any excess credit must be dealt with separately under Rule 57E at the buyers' end.

---