1990 (5) TMI 127 - AT - Central Excise

Summary

Issues:
- Interpretation of Rule 233B of the Central Excise Rules regarding duty paid under protest.
- Classification of products under Tariff Item 15A versus Item 68 of the Central Excise Tariff.
- Refund claims based on duty paid under protest.
- Validity of rejection of refund claim due to lack of "Under Protest" endorsement on Gate Passes.

Analysis:
The appeal before the Appellate Tribunal CEGAT, CALCUTTA involved M/s. Metroark Pvt. Ltd. challenging an Order-in-Appeal passed by the Collector of Central Excise (Appeals) regarding the disallowance of part of their refund claim due to Gate Passes not being stamped with the endorsement "Under Protest." The Collector (Appeals) upheld the Assistant Collector's decision based on Rule 233B of the Central Excise Rules, emphasizing the necessity of the endorsement for duty paid under protest to be considered valid. The appellants argued that they had been paying duty under protest for products wrongly classified under Tariff Item 15A instead of the correct classification under Item 68.

The appellants contended that their refund claims for duty paid under protest had been settled by the department for earlier and subsequent periods, indicating a consistent practice of protesting duty payments. However, the respondent Collector opposed this argument, stating that refund cannot be granted based on assumptions or presumptions. The Tribunal reviewed the submissions and records, noting that Rule 233B, introduced in May 1981, could not be applied retroactively to clearances made during the period of April 1978 to September 1978, which was the subject of the appeal.

The Tribunal observed that the appellants had actively protested the classification of their products under Tariff Item 15A through written correspondences with the department, indicating their disagreement and submission of necessary documentation for provisional assessment. The Assistant Collector's letters and subsequent approvals reflected the ongoing dispute regarding the correct classification of the products. The Tribunal highlighted the lack of an order rejecting the claim as time-barred due to non-protest, emphasizing that duty paid under protest only affects the limitation period for claims.

In a significant reference to a previous Supreme Court judgment in India Cements Ltd. v. Collector of Central Excise, the Tribunal noted that protesting against levy or paying duty under protest does not require a specific formality like marking gate passes with "Under Protest." The Court's ruling emphasized that raising contentions against duty levy constitutes a protest, thereby negating the limitation for refund claims. Applying this precedent, the Tribunal allowed the appeal, overturning the rejection of the refund claim based on the absence of the "Under Protest" endorsement on Gate Passes. The appellants were granted consequential benefits based on the recognition of their consistent protest against duty payments.