9911796707
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Issues:
Classification of product as non-excisable, rejection of refund claims as time-barred and inadmissible, entitlement to refund under protest, compliance with procedural rules for refund, application of limitation for refund claims, denial of refund on the doctrine of unjust enrichment. Classification of Product: The petitioner, a manufacturing unit, undertook job work of re-engraving on second-hand rollers and filed a classification list to classify the product as non-excisable. The Assistant Collector initially accepted the claim, but later directed clearance of the product as excisable under a new tariff. The appellate authority allowed the petitioner's appeal, holding that the work undertaken does not amount to manufacture, and the product is non-excisable. Rejection of Refund Claims: The petitioner filed refund claims for the period post the appellate authority's decision, totaling Rs. 5,59,301. The Assistant Collector rejected the claims as time-barred and inadmissible, citing Section 11B of the Central Excises and Salt Act. The petitioner contended that the limitation does not apply as the duty was paid under protest and relied on precedents to support the claim for refund. Entitlement to Refund Under Protest: The Assistant Collector rejected the refund claims, arguing that the duty was not paid under protest during the pendency of the appeal. However, the High Court found merit in the petitioner's submission that a letter clearly indicated the intention to pay duty under protest, even though specific phraseology was absent. The Court held that the petitioner effectively communicated the protest to the Department. Compliance with Procedural Rules for Refund: The Assistant Collector contended that the petitioner failed to comply with Rule 233B of the Central Excise Rules regarding duty paid under protest. The High Court found no merit in this argument, stating that the substantive right to refund arises from the appellate authority's order, and procedural lapses do not disentitle the taxpayer from recovering the duty paid. Application of Limitation for Refund Claims: The High Court emphasized that the limitation under Section 11B does not apply when seeking a refund following an order by an appellate or revisional authority. Refund claims cannot be denied based on limitation when the appellate authority sets aside the original order. Precedents were cited to support this interpretation. Denial of Refund on Unjust Enrichment: The Assistant Collector attempted to deny the refund on the doctrine of unjust enrichment, arguing that the duty was not passed on to customers. The High Court dismissed this argument, stating that duty was paid under protest, and the petitioner was entitled to a refund based on the appellate authority's decision. The Court ruled in favor of the petitioner, directing the respondents to grant the refund with interest and costs.
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