1989 (4) TMI 80 - SC - Central Excise

Whether the appellant is entitled to refund of 22, 43, 002.09 paid as excise duty on the price of packing material used for packing of superfine cement which according to the appellant was paid under protest whereas according to the respondent it was not paid under protest and therefore the claim of refund is barred by time? Held that - A perusal of the letter dated June 11 1974 clearly shows that all possible contentions which could be raised against the levy of duty on the value of packing material were raised. If this could not be said to be a protest one fails to understand what else it could be. It does not require much time to analyse the contents of the letter. An ordinary reading with common sense will reveal to anybody that the appellant was not accepting the liability without protest. We have no hesitation to hold that the letter was in the nature of protest. That being the position the question of limitation does not arise for refund of the duty. The Appellate Collector and the Tribunal clearly stated that the only question agitated before them was the question of limitation. The order does not indicate that the counsel for the Department or the departmental representative raised any other question on merits. Indeed no objection could have been raised on the merits of the matter. Appeal allowed & the appellant is entitled to refund of the amount..

Summary

Issues:
- Entitlement to refund of excise duty paid under protest on packing material used for superfine cement.
- Application of Rule 11 of the Central Excise Rules, 1944 for refund claim.
- Question of limitation in claiming refund.
- Interpretation of protest against duty payment.
- Consideration of Trade Notices in determining liability.
- Application of Central Government's decision in similar cases.
- Lack of objection on merits by authorities in previous proceedings.

Analysis:

The Supreme Court judgment involved the determination of whether the appellant was entitled to a refund of excise duty paid on packing material used for superfine cement. The dispute centered around whether the duty was paid under protest, as claimed by the appellant, or not. The Assistant Collector rejected the refund claim citing Rule 11 of the Central Excise Rules, 1944 and the issue of limitation. The Appellate Collector and the Tribunal upheld the decision based on the limitation aspect, without disputing the merits of the claim. The Tribunal specifically focused on the question of limitation, leading to the current appeal.

The appellant's contention was that the duty was paid under protest, as evidenced by a letter raising objections against the levy of packing charges on superfine cement. The letter, dated June 11, 1974, clearly articulated the appellant's disagreement with the duty on packing charges. The Court, after considering the contents of the letter, concluded that it constituted a protest against the duty payment. The Court emphasized that the letter raised all possible contentions against the levy, indicating a clear protest by the appellant.

The Court also considered the Trade Notice issued by the Madras Collectorate, which clarified that the cost of packing was not to be included in the assessable value. The appellant's counsel referenced a similar decision by the Central Government in the case of Birla Cement Works, where a comparable claim was allowed without a Trade Notice. The Court highlighted that the authorities should have applied the same reasoning to all similar cases, especially since no objections on merits were raised in previous proceedings.

In light of the above analysis, the Court allowed the appeal, setting aside the orders of the Tribunal and other authorities. It declared that the appellant was entitled to a refund of the amount paid as excise duty. Additionally, the Court ordered the payment of interest at a specified rate from the date of the refund refusal, along with costs of the appeal. The judgment underscored the importance of recognizing protests against duty payments and applying consistent decisions across similar cases to ensure fairness and adherence to legal principles.