1987 (9) TMI 133 - AT - Central Excise

Issues Involved:

1. Refund of excise duty on post-manufacturing expenses/profits.
2. Refund claims related to average freight, additional sales tax, octroi, and transit insurance.
3. Applicability of the General Law of Limitation vs. Section 11B of the Central Excises & Salt Act, 1944.
4. Whether duty was paid under protest.
5. Calculation and admissibility of refund claims.

Issue-wise Detailed Analysis:

1. Refund of excise duty on post-manufacturing expenses/profits:

The appellants, manufacturers of products under T.I.1A and IB, filed refund claims for excise duty paid on post-manufacturing expenses and profits (selling costs and selling profits) for the period from June 1979 to March 1984. The Assistant Collector rejected these claims, holding that selling costs and profits form part of the assessable value as per the Supreme Court judgment, and thus, duty paid on these elements was correctly paid. This decision was confirmed by the Collector of Central Excise (Appeals), Bombay.

2. Refund claims related to average freight, additional sales tax, octroi, and transit insurance:

The appellants filed revised refund claims covering the period up to 9-3-1984 for duty paid on average freight, additional sales tax, octroi, and transit insurance. The Assistant Collector held that while these elements are eligible for deductions from the assessable value, the claims were time-barred as they were filed after six months from the date of duty payment, as stipulated under Section 11B(1) of the Central Excises & Salt Act, 1944. Additionally, the claims included loading and unloading charges within average freight, which are not deductible, leading to the rejection of these claims.

3. Applicability of the General Law of Limitation vs. Section 11B of the Central Excises & Salt Act, 1944:

The appellants argued that the General Law of Limitation should apply, starting from the date when the mistake was discovered, citing various case laws. However, the Tribunal held that the General Law of Limitation is inapplicable to claims for refund of duty paid under the mistake of law when filed before authorities under the Central Excises & Salt Act. The Tribunal referenced the Supreme Court's decision in Miles India v. Appellate Collector of Customs, which confirmed that the statutory time limit under Section 27 of the Customs Act applies, and this principle was extended to Section 11B of the Central Excises & Salt Act.

4. Whether duty was paid under protest:

The appellants contended that all payments of excise duty on and after 7-6-1979 were made under protest. The Assistant Collector and the Collector (Appeals) found no evidence that the letter dated 7-6-1979, allegedly indicating payment under protest, was ever received by the Department. For the period after 1-6-1981, Rule 233B of the Central Excise Rules, 1944, required a formal procedure for protest, which the appellants admitted they did not follow. Consequently, the Tribunal held that the duty was not paid under protest, thereby upholding the time-barred status of the refund claims.

5. Calculation and admissibility of refund claims:

The Tribunal noted that part of the refund claims for the period 22-3-1983 to 30-7-1983 was received within the statutory time limit. However, the Assistant Collector rejected these claims due to the inclusion of non-deductible loading and unloading charges within average freight. The Tribunal directed that the appellants should file fresh calculations for the claimable amount on account of average freight, unloading charges, transit insurance, additional sales tax/turnover tax, and octroi, excluding loading charges. The Assistant Collector was instructed to verify these calculations and grant the consequential refund for the periods falling within the statutory time limit.

Conclusion:

The appeal was allowed to the extent that the appellants were permitted to file fresh calculations for admissible deductions, and the Assistant Collector was directed to grant refunds accordingly. The appeal was otherwise rejected.

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