Excise duty refund on third packing cost sustained in principle, but payment remained subject to statutory refund safeguards.

Refund of excise duty on the cost of third packing was upheld in principle because the third packing was only protective during transit and the smaller carton of 50 syringes was the unit of wholesale sale, so its cost did not disturb the assessable value. However, the actual disbursement of refund had to comply with the amended requirements in Section 11B(2) of the Central Excise Act, 1944. The refund claim could not be finally granted without notice to the assessee and examination of statutory entitlement before payment.

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Issues: Whether the refund of excise duty paid on the cost of third packing was liable to be sustained, and whether the refund could be granted without examining the applicability of Section 11B(2) of the Central Excise Act, 1944.

Analysis: The refund claim had been rejected without issuing notice or giving the assessee an opportunity to establish entitlement. The appellate order accepting the refund was found to suffer from no infirmity on the question whether the cost of the third packing formed part of the assessable value, because the third packing was only for protecting the smaller cartons during transit and the smaller carton containing 50 syringes was the unit of wholesale sale. At the same time, the grant of refund had to comply with the amended statutory requirements under Section 11B(2).

Conclusion: The refund order was sustained in principle, but actual grant of refund was made subject to due notice and examination of the applicability and consequence of Section 11B(2) of the Central Excise Act, 1944.

Final Conclusion: The appeal did not succeed in dislodging the refund entitlement, but the matter was sent to the adjudicating authority for verification of the statutory bar before refund was paid.

Ratio Decidendi: Where refund entitlement is otherwise justified, it must still be tested against the mandatory requirements governing refund under the applicable statutory provision before disbursement.

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