1999 (8) TMI 153 - AT - Central Excise

Summary

Issues:
Appeal against non-refund of deposited amount of Rs. 2.5 lakhs made under protest, applicability of Section 11B for refund claim, interpretation of protest under Central Excise Rules.

Analysis:
The case involved an appeal regarding the non-refund of Rs. 2.5 lakhs deposited by the assessee under protest at the insistence of the Department. Central Excise Officers visited the factory and alleged unaccounted stocks of raw oils and vegetable ghee, leading to the deposit by the Managing Director. The appellant filed a refund claim after the proceedings were dropped, stating that the deposit was made provisionally and under protest. The Assistant Collector and the Collector (Appeals) rejected the claim, prompting the appeal.

During the arguments, the appellant's counsel emphasized that the amount was deposited under protest to cover any duty payable, citing various Tribunal judgments where a letter of protest was deemed sufficient under Rule 233B of the Central Excise Rules. The Revenue, represented by the JDR, contended that the deposit was not covered by Section 11B and referred to the Mafatlal Industries Ltd. case.

The Tribunal noted that the deposit was made before any demand notice, based on the Officers' observation of duty evasion. The appellant filed the refund claim promptly after the proceedings were dropped. The Tribunal acknowledged the endorsement of "under protest" on the challan and a subsequent letter reiterating the protest. The Commissioner (Appeals) considered the refund claim as duty-related under Section 11B, but the Tribunal agreed with the appellant's argument that the deposit under protest was not subject to limitation under Section 11B.

Ultimately, the Tribunal set aside the earlier decision, allowing the appeal and directing the authorities to provide any consequential relief to the appellants as per the law. The judgment emphasized that the amount was paid under protest, making it exempt from the limitations under Section 11B, contrary to the findings of the lower authorities.