2009 (10) TMI 11 - HC - Central Excise

Refund of duty deposited under protest period of limitation held that - Whether the duty was in fact deposited under protest is a question of fact or not, it appears that this matter was not seriously contested before the Excise Authorities. We may make it clear that if the duty was not deposited under protest then the limitation for seeking refund is six months only. However, it is deposited under protest, there is no limitation to claim refund matter remitted back to decided the question as to whether the duty was in fact deposited under protest or not

Summary

Issues:
1. Whether duty paid on non-excisable goods can be retained by the respondents?
2. Would duty collected against the provisions of the charging section amount to unjust enrichment?
3. Is the duty collected against the charging section subject to limitation for refund?
4. Can duty collected in contravention of the Constitution be retained?
5. Can refund of duty paid under mistaken law be denied due to limitation?

Analysis:
The High Court considered an excise appeal concerning the refund of excise duty paid by the appellant, HRTC, and whether it was time-barred. The main issue was whether the claim for refund was barred by limitation. The relevant provision, Section 11-B(1) of the Central Excise Act, 1944, required that any person claiming a refund must apply before the expiry of six months from the relevant date. However, an amendment extended this period to one year. The appellant contended that they had deposited the duty under protest, invoking the second proviso to the section, which exempts cases under protest from the limitation period.

The Court noted that whether the duty was deposited under protest was a factual matter. The appellant presented original documents mentioning the deposit under protest. The Court emphasized that if the duty was not deposited under protest, the limitation for seeking a refund would be six months. However, if it was under protest, there would be no limitation for claiming a refund. The Court decided to set aside the orders and remit the matter to the Assessing Officer to determine if the duty was indeed deposited under protest. The Officer was instructed to allow both parties to present their arguments and evidence on this issue.

In conclusion, the High Court disposed of the excise appeal, emphasizing the importance of determining whether the duty was deposited under protest to ascertain the applicability of the limitation period for claiming a refund. The decision highlighted the significance of factual evidence in such cases and the need for a fair opportunity for parties to present their case before the Assessing Officer.