1995 (2) TMI 207 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the item.
2. Limitation period for filing the refund claim.
3. Validity and scope of the protest letter.

Issue-wise Detailed Analysis:

1. Classification of the Item:
The appellants claimed that their porcelain insulators should be classified under Item 68, benefiting from Notification No. 176/77, even before the insertion of Explanation-II. The Assistant Collector initially classified the items under Item 23B(4) and exempted them under Notification No. 152/71. However, the Collector (Appeals) ruled that the insulators should indeed be classified under Item 68 based on precedents from the Madras High Court and CEGAT. This classification entitles the appellants to the benefits under Notification No. 176/77.

2. Limitation Period for Filing the Refund Claim:
The Assistant Collector rejected the refund claim as time-barred, noting that the appellants did not follow the prescribed procedure for registering a protest. However, the Collector (Appeals) found that before Rule 23B was introduced by Notification No. 115/81, no prescribed procedure existed for registering a protest. Therefore, the appellants' method of writing a protest letter and marking payments as "under protest" on TR 6 and gate passes was deemed sufficient, and the time bar did not apply.

3. Validity and Scope of the Protest Letter:
The appellants argued that their protest letter should cover all aspects of their claim, including reclassification under Item 68 CET. The SDR contended that the protest letter was specific to the lower exempted rate under Notification 152/71 and did not cover reclassification. The Tribunal found merit in the SDR's argument, noting that the protest letter only mentioned the exemption under Notification 152/71 and not the reclassification under Item 68. The authorities are bound by the statutory time limits under Section 11B of the Central Excises & Salt Act, 1944, and cannot relax these limits. Consequently, the Tribunal upheld the Collector (Appeals)'s decision to restrict the refund to the specific terms of the protest letter.

Separate Judgments:

Member (Technical):
The Member (Technical) agreed with the SDR's submissions, emphasizing that the protest letter was specific to the exemption under Notification 152/71. The claim for reclassification under Item 68 was a new ground not covered by the protest letter. Therefore, the appeal was rejected, and the order of the Collector (Appeals) was upheld.

Member (Judicial):
The Member (Judicial) disagreed, arguing that the letter of protest extends the time for filing a refund claim. He believed that the issue of reclassification could be considered at the time of the refund claim, as the refund claim was filed in time. The Member (Judicial) proposed allowing the appeal with consequential relief, based on the Collector (Appeals)'s finding that the items were classifiable under Item 68.

President's Decision:
The President reviewed the differing opinions and sided with the Member (Technical). He noted that the protest letter dated 31st March 1976 did not mention future clearances or payments under protest. The refund claim filed in 1980 could not enlarge the scope of the original protest. Therefore, the refund claim for reclassification under Item 68 was time-barred, and the appeal was rejected.

Final Order:
In light of the majority view, the impugned order passed by the Collector (Appeals) was upheld, and the appeal was rejected.