1990 (4) TMI 120 - AT - Central Excise

Summary

Issues Involved:
1. Classification and dutiability of Ayurvedic medicines during 1-3-1975 to 28-2-1978.
2. Time-bar on the refund claim.

Detailed Analysis:

1. Classification and Dutiability of Ayurvedic Medicines:
The appellants sought a refund for the period from 1-3-1975 to 28-2-1978, claiming their products were Ayurvedic medicines exempt from duty under Tariff Item 68. The Assistant Collector rejected this claim, stating that the relevant order only applied to products cleared from 1-3-1978 to 30-6-1982 and had no bearing on the earlier period. The appellants had filed classification lists declaring their products under Tariff Item 68 without protest, and did not appeal the classification approval. The Collector upheld this decision, noting that the appellants' continued duty payments and lack of appeal indicated acceptance of the classification. The Collector concluded that the classification under Tariff Item 68 was valid and final, and the refund claim was not legally permissible.

In contrast, the President of the Tribunal found that the appellants' letter dated 15-3-1975 constituted a protest against the duty classification. He noted that the letter argued the goods were not liable to duty under either Item 14E or Item 68 and that the appellants were compelled to pay duty under protest. He referenced the Supreme Court's ruling in India Cements Ltd. v. Collector of C. Ex., which held that a letter raising objections against duty constituted a protest. Thus, he concluded that the duty payments were made under protest, and the bar of limitation did not apply.

2. Time-bar on the Refund Claim:
The Assistant Collector and the Collector both held that the refund claim was time-barred under Section 11-B of the Central Excises and Salt Act. They argued that the appellants did not mark their duty payments as "under protest" on any clearance documents and that the letter dated 15-3-1975 did not explicitly indicate a protest. The Collector emphasized that the appellants did not appeal the classification approval within the required three months and continued to pay duty without dispute until 1-3-1978.

The President disagreed, stating that the letter dated 15-3-1975, combined with the Superintendent's coercive letter dated 19-4-1975, indicated that the appellants were paying duty under compulsion, which should be considered as payment under protest. He argued that the absence of explicit protest markings on payment documents did not negate the fact that the payments were made under protest, as evidenced by the appellants' letter.

Final Order:
The majority opinion, including the President and Member (J), concluded that the impugned Order-in-Appeal should be set aside. The matter was remanded to the Collector (Appeals) for de novo disposal in accordance with law, taking into account the Tribunal's findings that the appellants' letter constituted a protest and that the bar of limitation did not apply. The Collector (Appeals) was instructed to give due opportunity to the appellants during the de novo proceedings.