4% refund of additional duty

You can claim full (100%) cenvat on additional duty of 4%:

As per "Multimetals Ltd. v. ACCE 57 ELT 209 (SC) = 1992 (1) SCC 715 = AIR 1992 SC 1532 = 1992 AIR SCW 1644" and "UOI v. Indian Alluminium Co. Ltd. - Cenvat is available on entire quantity of input even if part of input goes in process loss, since all inputs are used in the manufacture of final product, even if it is not reflected in final product.

Also, as per "CCE v. IPF Vikram India 2002" - Cenvat on inputs which have gone in waste can also be availed.

Hence, in your case if its a process loss or even if its a waste you can still claim full cenvat on the additional duty of 4%.

But Rishab, the problem here is you pay 12 + 4= 16% duty and you pass on only 12% and 4% will keep on accumulating if the value addition is less then 33%