2002 (1) TMI 711 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit by Asstt. Commissioner.
2. Reversal of Modvat credit under protest.
3. Rejection of refund claim by jurisdictional Dy. Commissioner.
4. Applicability of time-bar provisions under Section 11B.
5. Interpretation of Rule 233B and Section 35F.
6. Comparison of Tribunal decisions with Supreme Court's ruling in Mafatlal Industries case.

Analysis:
1. The Asstt. Commissioner disallowed Modvat credit of Rs. 47,723 to the appellants, which was subsequently allowed by the Commissioner (Appeals) in an appeal. The assessee then filed a refund claim, rejected by the Dy. Commissioner and Commissioner (Appeals) citing time-bar under Section 11B of the Central Excise Act due to lack of formal letter of protest as required under Rule 233B.

2. The consultant argued that the reversal of Modvat credit made under protest should be treated as a deposit under Section 35F, not subject to time-bar provisions of Section 11B. Referring to the Supreme Court's decision in Mafatlal Industries case, the consultant contended that the protest registered in RT-12 Returns should suffice. However, the Tribunal noted that the situation did not fall under exceptions recognized by the Supreme Court, upholding the Commissioner (Appeals) decision based on Rule 233B requirements.

3. The Tribunal emphasized that the reversal of Modvat credit by the assessee was not due to any court order, thus necessitating compliance with Rule 233B for a formal letter of protest. The consultant's argument regarding Section 35F was dismissed as the payment was not a deposit pending appeal, given the credit reversal occurred before filing an appeal with the Commissioner (Appeals).

4. Despite the consultant citing Tribunal decisions like Mahalakshmi Industries and Flash Labs Ltd., the Tribunal found them inapplicable post the Supreme Court's ruling in Mafatlal Industries case. Consequently, the Tribunal upheld the impugned order, rejecting the appeal against the refund claim rejection, emphasizing the necessity of complying with Rule 233B and the time-bar provisions of Section 11B.