1991 (12) TMI 173 - AT - Central Excise

Summary

Issues:
1. Whether the refund claim of the appellants is barred by limitation.

Analysis:
The case involves a dispute regarding the limitation period for a refund claim filed by the appellants. The facts reveal that the goods, specifically electronic goods, were initially exempted from duty but duty was later levied. The appellants, engaged in retail sales, met with the Asstt. Collector to discuss permissible deductions, including 18% abatement from the retail price. Despite paying duty under protest as advised by the Asstt. Collector and submitting detailed representations, their refund claim for duty paid under protest was rejected by the authorities on the grounds of non-compliance with formalities.

The main contention raised by the advocate for the appellants was that the duty paid remained under protest until a speaking order was passed by the Asstt. Collector, which was done only on 17-2-1989. The advocate argued that the provisions of Rule 233(b) regarding compliance with formalities like affixing "duty paid under protest" on documents were directory, not mandatory. Citing precedents, the advocate emphasized that failure to strictly comply with Rule 233(b) should not bar the refund claim. The advocate also highlighted that the appellants had given notice of their refund claim through various communications and endorsements on price lists.

On the other hand, the Department contended that the protest letter did not constitute a refund claim as per Rule 233(b) and that strict compliance with formalities was necessary for a valid refund claim. The Department argued that the appellants had not adhered to the requirements of Rule 233(b), justifying the rejection of the refund claim as time-barred and non-compliant.

The Tribunal analyzed the contentions of both parties and examined the timeline of events leading to the refund claim. It noted that the appellants had clearly indicated their intention to pay duty under protest in their communications with the Asstt. Collector and in the price lists. The Tribunal emphasized that substantial compliance with Rule 233(b) sufficed, and failure to endorse certain documents did not invalidate the refund claim. Citing legal precedents, including judgments from the Bombay High Court and the Tribunal, the Tribunal held that the failure to strictly comply with formalities did not affect the refund claim in the present case. Additionally, the Tribunal referred to a previous order directing the Asstt. Collector to dispose of protest letters by a speaking order, which was done in this case on 17-2-1989.

Ultimately, the Tribunal allowed the appeal, directing the Asstt. Collector to refund the amount claimed by the appellants, as the refund claim was not barred by limitation and the failure to comply with certain formalities did not invalidate the claim based on the facts and circumstances of the case.