Refund on trade discounts accepted where discount schemes were known at clearance and uniformly available under excise refund law.

Refund under the Central Excise Act was considered in relation to duty paid on cash discount, special discount and target discount. Rejection of the refund claim merely because duty had been paid knowingly was found unsustainable, as refund entitlement depends on compliance with the governing refund provisions. Cash discount not actually received by the buyer was treated as a permissible component where the discount scheme was known in trade at clearance and uniformly available. Target discount also did not justify rejection on the reasons adopted below, as it was not shown to be unknown to buyers at clearance or not uniformly offered. The matter was remitted for fresh adjudication after hearing the appellant.

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Issues: Whether the assessee's refund claim in respect of duty paid on cash discount, special discount and target discount was liable to be rejected on the grounds recorded by the lower authorities, and whether the matter required reconsideration under Section 11B of the Central Excise Act, 1944.

Analysis: The rejection of part of the refund claim on the ground that duty had been paid knowingly was held to be unsustainable, since the admissibility of refund depends on compliance with the law governing refund claims. The cash discount not actually received by the buyer was treated as a permissible component, as the discount scheme was known in trade at the time of clearance and was uniformly available. The target discount was also found not to justify rejection on the reasoning adopted below, because it was not shown that the discount was unknown to the buyers at the time of clearance or not offered uniformly.

Conclusion: The impugned order was set aside and the refund claim was remitted to the jurisdictional adjudicating authority for fresh decision after hearing the appellant.

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