2003 (12) TMI 372 - AT - Central Excise

Summary

Issues: Revenue's challenge to refund of duty amount based on time limitation and protest by the Department.

In this case, the Revenue challenged an order-in-appeal where the Commissioner (Appeals) allowed the refund of duty amount to the respondents, who were engaged in the manufacture of bars. The dispute arose regarding the classification and rate of duty payable. The respondents had initially deposited the duty at a higher rate under protest as demanded by the Department. The Tribunal later decided in favor of the respondents in December 1990, but the Department challenged this decision before the Apex Court, which finally resolved the matter in 1997.

The Department contended that the refund claims should have been filed within six months from the Tribunal's order, and since the respondents did not do so, their claims were dismissed by the adjudicating authority as time-barred. However, the Commissioner (Appeals) reversed this decision, stating that the duty was paid under protest and was never vacated by the Department. The Department was obligated to refund the excess differential duty charged from the respondents after the Apex Court's decision.

The learned JDR argued that the refund claims should have been filed after the Department's order in favor of the respondents, and since they were not filed within six months from that order, they should be considered time-barred. The judge disagreed, noting that the respondents could not file any refund claim while the matter was sub judice before the Apex Court. The refund of the excess duty was only due after the Apex Court affirmed the Tribunal's order.

Moreover, the protest by the respondents while depositing the duty amount did not automatically cease with the Tribunal's decision in their favor, as the Department had challenged that decision. The protest needed to be vacated by the Department through an appealable order. The Commissioner (Appeals) correctly relied on precedent stating that there cannot be an automatic vacation of the protest.

The Department did not dispute that the refund claims were not affected by the doctrine of unjust enrichment. The Commissioner (Appeals) correctly applied the law that the refund of duty paid under protest would not be barred by unjust enrichment, a point not challenged by the Department.

Ultimately, the judge found no legal infirmity in the Commissioner (Appeals) order and upheld it, dismissing the Revenue's appeals.