2014 (9) TMI 146 - HC - Central Excise

Refund claim - period of limitation - whether the petitioner s letters dated 5-10-1995 and 5-12-1995 clearly amount to lodging protest - Held that - The language and contents of the letter dated 5-10-1995 leave nothing to doubt or guess that the assessee had pleaded, in unequivocal terms, with the department that duty was not payable on the additions made to the assessable value of goods towards transportation, insurance and handling/delivery charges. The contents of the letter dated 5-12-1995 further make it clear that despite the assessee having lodged the protest by the letter dated 5-10-1995, the department had been insisting for making such payment and hence the assessee put on record emphatic denial of the department s propositions; and the statement had been even to the extent that the insistence for such a payment would be unjust and against the principles of justice. Aforesaid two letters dated 5-10-1995 and 5-12-1995 could only be regarded as the letters of protest. - Indisputably, no specific form of protest has been provided in the Rules. - A bare look at the second proviso to sub-section (1) of Section 11B makes it clear that the question of limitation does not arise in the case where the duty has been paid under protest. - Decided in favor of assessee.

Summary

Issues Involved:
1. Whether the Tribunal was justified in rejecting the petitioner's refund claim as time-barred.
2. Whether the petitioner's letters dated 5-10-1995 and 5-12-1995 amounted to lodging a protest as required under Rule 233B of the Central Excise Rules, 1944.

Detailed Analysis:

Issue 1: Time-barred Refund Claim
The primary issue was whether the Tribunal was justified in rejecting the refund claim of the petitioner as time-barred. The court noted that the assessee had made a claim on 25-6-1998 for a refund of differential duty paid under protest. The Deputy Commissioner and the Commissioner (Appeals) both rejected the claim as time-barred, stating that the letters dated 5-10-1995 and 5-12-1995 were not proper protests under Rule 233B. The Tribunal upheld these decisions, agreeing that the letters did not constitute a protest and that the procedure under Rule 233B was not followed.

Issue 2: Lodging Protest under Rule 233B
The second issue was whether the letters dated 5-10-1995 and 5-12-1995 amounted to lodging a protest under Rule 233B. The court examined the contents of these letters, which clearly stated the assessee's disagreement with the inclusion of transportation, insurance, handling, and delivery charges in the assessable value of goods. The court found that these letters were unequivocal protests against the levy in question.

The court referred to the Supreme Court's decision in India Cements Ltd. v. Collector of C. Ex., which held that a similar letter constituted a protest. The court also noted that Rule 233B does not prescribe a specific form for lodging a protest and that the procedure should not be construed in a narrow or hyper-technical manner. The court emphasized that substantive compliance with Rule 233B is sufficient and that the letters in question met this requirement.

The court also referred to the Constitution Bench decision in Mafatlal Industries Ltd. v. Union of India, which stated that the procedure under Rule 233B is meant to keep a record of the payment of duty under protest and should not be interpreted in a way that conflicts with the substantive provisions of Section 11B(1) of the Act.

Conclusion:
The court concluded that the letters dated 5-10-1995 and 5-12-1995 amounted to lodging a protest under Rule 233B and that the Tribunal was not justified in rejecting the refund claim as time-barred. The court held that the assessee had indeed lodged a protest and made the payment of duty under protest. Consequently, the claim for refund could not be rejected on the ground of limitation. The court restored the refund claim for consideration on its merits by the appropriate authority.