2013 (12) TMI 21 - AT - Central Excise

Eligibility for SSI Exemption under Notification No. 08/2003 - Value of clearances not beyond the limit - Clearance of refined oils and soap Duty under Protest paid Held that - Whether there was any provision for payment under protest under law - No specific provision was brought to notice - where the payment under protest finds its place is in the Explanation to Section 11B(1) of Central Excise Act, 1944 - This proviso provides that the limitation of one year was not applicable where any duty has been paid under protest. This is contrary to the position existing under erstwhile Central Excise Rules, 1944. Earlier, there was a specific rule for payment under protest under Rule 233 of Central Excise Rules and this rule besides providing for payment under protest also gave the procedure to be followed briefly. However no such provisions exist under the law and either side could not bring any such provision to our notice. Whether a show-cause notice should have been issued for appropriation of the amount paid by the appellant under protest Held that - Once the appellant paid the amount and Department did not issue notice, the matter should have ended there - The appellants after making payment, wanted to convert it into a dispute and have asked the Superintendent concerned to issue a show-cause notice to them - The law does not contemplate this - the proceedings initiated by the Department were not required at all for appropriation and vacating the protest - the payment has attained finality after one year, appeal has no merit. When there is no contest of the demand or duty liability on merits and they are not in a position to say what documents are required by them or which provision of notification they do not understand, it is difficult to find fault with the procedure followed by the adjudicating authority who has given an opportunity of personal hearing and has passed an order outlining the provisions of notifications according to which appellant is liable to pay and hence has held that the payment made by them is proper and correct. Department has explained the notification provisions, informed the assessee in spite of the fact that the assessee did not explain why they were having an impression that they were not liable to pay and did give an importunity by giving personal hearing before appropriation to explain their case as to why they are eligible for exemption - The end is justice and show-cause notice is a means to that end Decided against Assessee.

Summary

Issues Involved:
1. Eligibility for SSI exemption under Notification No. 08/2003-CE.
2. Requirement of a show-cause notice under Section 11A of the Central Excise Act.
3. Appropriation of duty paid under protest.
4. Compliance with principles of natural justice.

Issue-wise Detailed Analysis:

1. Eligibility for SSI Exemption:
The appellant contended that they were eligible for SSI exemption under Notification No. 08/2003-CE, as their clearances in the financial year 2002-03 did not exceed Rs. 3 crore. However, the Department argued that the appellant's clearances amounted to Rs. 2997.41 lakh, which did not fall under any exempted categories, thus making them ineligible for the exemption for the year 2003-04. The Tribunal noted that the refined oils attracted duty from 01/03/2003, and the appellant's clearances in April 2003 without payment of duty were not eligible for exemption as per the amended Notification No. 30/2003-CE.

2. Requirement of a Show-Cause Notice:
The appellant argued that a show-cause notice under Section 11A of the Central Excise Act was necessary for any demand of duty. They relied on the Supreme Court's decision in Metal Forgings Vs. UOI to support this claim. The Department countered that the appellant was informed about their ineligibility for SSI exemption through correspondence and that there was no coercive exercise to collect the money. The Tribunal observed that Section 11A(2B) allows for payment of duty based on self-ascertainment before the issuance of a notice, and since the appellant paid the duty under protest, the requirement for a show-cause notice did not arise.

3. Appropriation of Duty Paid Under Protest:
The appellant paid Rs. 5,24,148/- under protest and contended that the appropriation of this amount without a show-cause notice was illegal. The Tribunal noted that the payment under protest is recognized in the Explanation to Section 11B(1) of the Central Excise Act, which exempts such payments from the limitation period of one year for refunds. The Tribunal held that the Department's action to vacate the protest and appropriate the amount was in accordance with the law, as the payment had attained finality after one year without any further demand from the Department.

4. Compliance with Principles of Natural Justice:
The appellant claimed that the lack of a show-cause notice violated principles of natural justice. The Tribunal found that the appellant was given ample opportunity to present their case, including a personal hearing. The Tribunal emphasized that the requirement of a show-cause notice is to ensure natural justice, and in this case, the appellant was informed of the grounds for duty liability and had the opportunity to defend themselves. The Tribunal concluded that the Department had followed the principles of natural justice adequately.

Conclusion:
The Tribunal rejected the appeal, holding that the appellant was not eligible for SSI exemption, the payment under protest was properly appropriated, and the requirement of a show-cause notice was not applicable in this case. The Tribunal also found that the Department had complied with the principles of natural justice.