1989 (7) TMI 223 - AT - Central Excise

Summary

Issues:
1. Limitation under Section 11B of the Act for refund claim.
2. Classification of goods under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944.
3. Payment of duty under protest.
4. Merits of the dispute regarding classification of Ayurvedic medicines.

Analysis:
1. The case involved a dispute regarding the limitation under Section 11B of the Act for a refund claim by the respondents, who contended that the classification of goods under Item No. 68 CET was incorrect. The Assistant Collector dismissed the claim as time-barred, but the Collector (Appeals) found that the claim was not barred by limitation and upheld it on merits. The appellant challenged this order, arguing that the limitation provision did not apply before 6-8-1977.

2. The classification of goods under Item No. 68 CET was a crucial issue in the case. The respondents, engaged in manufacturing Ayurvedic medicines, argued that their products should not be classified under Item No. 68 but under a different category. They relied on past protests and legal judgments to support their contention, including the Gujarat High Court's ruling that specified goods in earlier tariff items should not fall under the residuary Item No. 68.

3. A significant aspect of the case was the payment of duty under protest by the respondents. The appellant contended that there were no explicit protest endorsements on duty-paying documents like gate passes and PLA. However, the respondents argued that they had protested against the levy from the beginning, even before the statutory procedure for registering protests was introduced in 1981. The Tribunal considered various precedents and held that the actions taken by the respondents constituted payment of duty under protest.

4. The final issue addressed was the merits of the dispute regarding the classification of Ayurvedic medicines. The Tribunal analyzed the relevant tariff items and legal interpretations to conclude that the subject goods did not attract duty under either Item No. 14E or No. 68 CET. The explanation inserted in Item No. 68 CET by the Finance Bill, 1980, further supported the respondents' contention, leading to the dismissal of the appeal and upholding of the impugned order in favor of the respondents.