1998 (5) TMI 376 - AT - Central Excise

Summary

Issues:
1. Classification of goods for excise duty
2. Refund claim rejection based on procedural grounds
3. Interpretation of Rule 233B regarding duty payment under protest

Classification of goods for excise duty:
The case involved a dispute regarding the classification of goods by the Tamil Nadu Electricity Board for excise duty purposes. The Board claimed certain goods as non-excisable in a classification list filed in 1987. The approved classification list was received by the Board in 1988. Despite this, they had been paying duty at a higher rate. Subsequently, a refund claim was filed, which was rejected by the original authority citing failure to follow the procedure under Rule 233B of the Central Excise Rules, 1944. On appeal, the lower appellate authority found in favor of the Board, noting that the goods were for captive consumption and that the classification list had been filed with the approved classification. The matter was remanded for reconsideration of the refund claim.

Refund claim rejection based on procedural grounds:
The original authority rejected the refund claim on the basis that the Board did not lodge a protest as per Rule 233B and failed to show that a specific letter was delivered to the authorities. The lower appellate authority disagreed, emphasizing that the classification list was filed with the approved classification and that the goods were not for general consumption but for captive use only. The lower appellate authority remanded the matter for further consideration, leading to the Revenue's appeal.

Interpretation of Rule 233B regarding duty payment under protest:
The Revenue contended that the refund claim was time-barred as the Board did not follow the procedure under Rule 233B, which requires an endorsement on gate passes when duty is paid under protest. The Revenue argued that since the procedure was not followed, the duty should be deemed to have been paid without protest. However, the Board argued that Rule 233B is directory, not mandatory, and that the approved classification list mentioning the goods as non-excisable constituted a protest lodged with the Revenue. The Tribunal agreed with the Board, stating that Rule 233B is procedural and directory, and as long as the Revenue was aware of the protest, the refund claim could not be considered time-barred. The Tribunal rejected the Revenue's appeal, upholding the lower appellate authority's decision in favor of the Board.

In conclusion, the Tribunal ruled in favor of the respondent, the Tamil Nadu Electricity Board, holding that the refund claim was not time-barred as the approved classification list served as a protest lodged with the Revenue. The Tribunal emphasized that Rule 233B is procedural and directory, and as long as the Revenue was aware of the protest, the refund claim could not be rejected on procedural grounds.