2001 (3) TMI 109 - HC - Central Excise

Summary

Issues Involved:
1. Entitlement to complete exemption from excise duty.
2. Validity of duty payment under protest.
3. Application of limitation period under Section 11B of the Central Excise Act, 1944.
4. Availability and exhaustion of alternate remedy under Section 35 of the Central Excise Act, 1944.

Detailed Analysis:

1. Entitlement to Complete Exemption from Excise Duty:
The petitioner, a private limited company, claimed complete exemption from excise duty on rice husk fired boilers and parts under Notification No. 120/81-C.E., dated 15-5-1981, and subsequent amendments. The petitioner contended that these items were classified as agricultural and municipal waste conversion devices producing energy, thus qualifying for exemption. The Department initially approved the classification list for exemption but later withdrew it, leading to the imposition of excise duty on clearances made during the specified period.

2. Validity of Duty Payment Under Protest:
The petitioner argued that the excise duty was paid under protest, thus exempting them from the limitation period under Section 11B. However, the court found no material evidence, such as an endorsement or acknowledgment from the competent officer, to substantiate the claim that the duty was paid under protest. Rule 233B of the Central Excise Rules mandates that an assessee must deliver a letter indicating payment under protest, which was not demonstrated by the petitioner.

3. Application of Limitation Period Under Section 11B:
Section 11B stipulates a six-month limitation period for claiming a refund of excise duty unless the duty was paid under protest. The court concluded that since the petitioner failed to prove that the payment was made under protest, the six-month limitation period applied. The Department partially accepted the refund claim within the limitation period but rejected the rest, amounting to Rs. 2,64,327/-, as it was beyond the six-month period.

4. Availability and Exhaustion of Alternate Remedy:
The petitioner did not exhaust the alternate remedy of appeal under Section 35 of the Central Excise Act. The court emphasized that the petitioner was aware of the right to appeal but chose not to pursue it. The court referenced the case of Titaghur Paper Mills Co. Ltd. v. State of Orissa to support the argument that failure to exhaust statutory remedies is fatal to the maintainability of the petition. The court held that the petition could be dismissed on this ground alone.

Conclusion:
The court dismissed the petition, ruling that the petitioner was not entitled to a refund beyond the six-month limitation period specified in Section 11B of the Central Excise Act. The petitioner also failed to demonstrate that the excise duty was paid under protest. Furthermore, the petitioner did not exhaust the alternate remedy of appeal under Section 35, making the petition untenable. The court found no illegality in the Department's decision and maintained the order passed by the Assistant Collector, Central Excise and Customs.