1988 (2) TMI 175 - AT - Central Excise

Summary

Issues:
1. Whether the claim for refund should have been rejected as barred by limitation under Rule 11 of Central Excise Rules, 1944.
2. Whether the duty paid under protest can escape the limitation stipulated in Rule 11 read with Rule 173-J of Central Excise Rules, 1944.

Analysis:

Issue 1:
The appeal by Revenue questioned the rejection of the respondents' claim for refund as time-barred under Rule 11 of Central Excise Rules, 1944 by the Collector of Central Excise (Appeals). The refund pertained to duty paid on fertilizers cleared between specific dates, which were manufactured before the imposition of Central Excise duty. The Madras High Court had previously ruled that such clearances were not liable to duty. The Departmental Representative argued that since the fertilizers were cleared after becoming liable to duty, the rate of duty should be as on the date of removal. However, the Respondents contended that pre-budget stocks were not liable to duty based on various legal precedents. The Tribunal examined multiple decisions and concluded that the claim for refund was not time-barred under Rule 11.

Issue 2:
The discussion revolved around whether duty paid under protest could avoid the limitation stipulated in Rule 11 and Rule 173-J of the Central Excise Rules, 1944. The Departmental Representative argued that the absence of provisions for payment under protest at the material time meant that the respondents could not escape the limitation. Conversely, the Respondents relied on legal precedents and highlighted that the payment under protest was made due to business expediency and compulsion of circumstances. The Tribunal emphasized that the respondents' timely application for refund, within four months of a relevant court judgment, and the absence of specific provisions like sub-rule (4) in Rule 11 at that time, supported the claim for refund. The Tribunal upheld the claim for refund, citing relevant judgments and the circumstances of the case.

In conclusion, the Tribunal dismissed the appeal, affirming that the respondents were entitled to the refund based on the legal principles surrounding duty paid under protest and the absence of specific provisions at the material time. The decision was in line with previous legal precedents and the facts of the case, ensuring that substantial justice was served despite statutory limitations.