1997 (1) TMI 300 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit.
2. Proper protest under Rule 233B of the Central Excise Rules, 1944.

Admissibility of Modvat credit:
The case involved an appeal by a Limited Company engaged in the manufacture of Paints & Varnishes against the rejection of Modvat credit by the Assistant Collector. The Collector of Central Excise (Appeals) later held the credit to be admissible. The company filed a refund claim, which was questioned due to the timing of the protest made under Rule 233B. The main issue was whether the protest made by the company was proper under the rules.

Proper protest under Rule 233B of the Central Excise Rules, 1944:
The appellant contended that the payment made under threat of coercive action should be treated as a protest, citing a decision of the Madras High Court. However, the Respondent argued that Rule 233B requires a prospective protest and compliance with the rule is mandatory. The Tribunal noted that the Madras High Court decision was rendered before the enactment of Rule 233B and the circumstances were different. The Tribunal held that the provisions of Rule 233B cannot be disregarded, even if the payment was made under threat, emphasizing the importance of compliance with the sub-rules of Rule 233B. The Tribunal dismissed the appeal, stating that failure to comply with the rule would result in the payment being considered without protest, to prevent the rule from becoming ineffective.

In conclusion, the Tribunal upheld the Collector of Central Excise (Appeals) decision, emphasizing the importance of following Rule 233B for making payments under protest and dismissing the appeal due to the lack of compliance with the rule despite the threat of coercive action by the Department.