1985 (7) TMI 230 - AT - Central Excise

Summary

Issues Involved:

1. Classification of 'cotton blanket cloth' and 'cotton waste blankets' under the correct Tariff Item.
2. Validity of the protest regarding duty payment.
3. Entitlement to refund and the applicable limitation period.

Issue-Wise Detailed Analysis:

1. Classification of 'cotton blanket cloth' and 'cotton waste blankets':

The respondents, M/s. India United Mills No. 1, classified 'cotton blanket cloth' under Tariff Item No. 19-I and 'cotton waste blankets' under Tariff Item No. 68. They claimed a refund of Rs. 6,25,200.40 for duty paid on 'cotton waste blankets' from 4-8-1977 to 28-6-1980. The Assistant Collector rejected the claim, asserting that the classification lists were not filed under protest, nor was there any letter of protest. The Collector (Appeals) later held that cotton blankets were classifiable under Tariff Item 19 CET, not 68 CET, and directed verification of the protest endorsements on GPIs.

2. Validity of the protest regarding duty payment:

The Assistant Collector noted that merely writing "duty paid under protest" on gate passes without reasons was insufficient. The Collector (Appeals) disagreed, noting that the duty was paid under protest as directed by the Central Excise Officers' letter dated 23-2-1979. However, the Tribunal found that the respondents did not follow the proper procedure for protesting the classification. They did not raise any dispute about the rate of duty or file any letter of protest. The Tribunal concluded that merely writing on gate passes was insufficient for claiming a refund.

3. Entitlement to refund and the applicable limitation period:

The Tribunal acknowledged that if no duty was payable under Tariff Item 68, the respondents could claim a refund for payments made under a mistake of law. However, the refund claim would be subject to the limitation period of 6 months from the date of payment. The Tribunal directed the Central Excise authority to verify if cotton blankets were not chargeable under Tariff Item 68 and, if so, to refund the duty paid within the 6 months immediately prior to the claim date, 24-7-1980.

Conclusion:

The appeal was allowed, the order of the Collector (Appeals) was set aside, and the matter was remanded to the Assistant Collector to verify the classification and the validity of the protest endorsements, and to process the refund for the period within the 6-month limitation.