1986 (9) TMI 325 - AT - Central Excise

Issues Involved:
1. Whether the duty paid for the period from 9-12-79 to 18-3-80 was made under protest and therefore not barred by limitation.
2. Whether the amended Rule 11 or the unamended Rule 11 is applicable to the refund claim made for the period between 27-7-77 and 5-8-77.

Detailed Analysis:

Issue 1: Payment of Duty Under Protest
The first issue concerns whether the payment of duty for the period from 9-12-79 to 18-3-80 was made under protest, thus making the refund claim not barred by limitation. The Respondents, M/s. Pen Workers, were manufacturers of Cinema Chairs classified under T.I. No. 40 of Central Excise Tariff. They submitted a classification list on 21-12-79 seeking classification under T.I. 68, which was provisionally approved on 7-3-80 and finally on 9-5-80. They claimed a refund of Rs. 1,55,587.46 for the excess duty paid. The Assistant Collector rejected the refund claim on 15-7-81, stating that the duty had not been paid under protest. However, the Collector (Appeals) found that the duty had indeed been paid under protest as evidenced by the Respondents' letter dated 21-11-78.

The Department argued that the letter cited by the Collector (Appeals) was for obtaining a license for manufacturing steel furniture and could not be relied upon to establish that duty was paid under protest. The Department also contended that since the classification of Cinema Chairs under T.I. 40 was not appealed, the refund claim should not be allowed. However, the Tribunal found that the Respondents had clearly stated in their letter dated 21-11-78 that they would be paying duty under protest, and the Department did not reject this protest. The Tribunal cited a similar case, Collector of Customs, Calcutta v. Stewards and Lloyds India Ltd., Calcutta, 1985 (22) E.L.T. 522 (Tribunal), where it was held that a protest lodged simultaneously with payment of duty was tantamount to claiming a refund. Therefore, the Tribunal upheld the Collector (Appeals)'s decision that the duty was paid under protest and the refund claim was not barred by limitation.

Issue 2: Applicability of Rule 11
The second issue concerns whether the amended Rule 11 or the unamended Rule 11 applies to the refund claim made for the period between 27-7-77 and 5-8-77. The Respondents claimed a refund of Rs. 33,031.80, arguing that the Cinema Chairs were not liable for duty under T.I. 40 but were classifiable under T.I. 68 and eligible for exemption under Notification No. 176/77. The Assistant Collector allowed a partial refund but rejected the claim for the period from 20-7-77 to 10-8-77 as time-barred. The Collector (Appeals) modified this order, holding that the period of limitation applicable was one year under the unamended Rule 11.

The Department contended that the refund claim was made after Rule 11 was amended, and therefore, the amended Rule should apply. However, the Tribunal referred to the Special Bench decision in Nagarjuna Steels Ltd. v. Collector of Central Excise, Hyderabad, 1985 (21) E.L.T. 854 (Tribunal), which held that the old Rule 11 would govern claims for duty paid before 6-8-77, even if the refund application was made after the amendment. The Tribunal also cited the Bombay High Court decision in Universal Drinks Pvt. Ltd. v. Union of India, 1984 (18) E.L.T. 207 (Bombay), which supported this view. Therefore, the Tribunal upheld the Collector (Appeals)'s decision that the unamended Rule 11 applied to the refund claim.

Conclusion:
Both appeals were rejected. The Tribunal upheld the Collector (Appeals)'s findings that the duty was paid under protest and that the unamended Rule 11 applied to the refund claim.

← Previous Next →