2001 (2) TMI 793 - AT - Central Excise

Summary

Issues:
- Disallowance of Modvat credit
- Rejection of refund claim on the ground of time bar

Disallowance of Modvat credit:
The appellants were disallowed Modvat credit amounting to Rs. 11,967.75 by the Assistant Commissioner of Central Excise, Jaipur. The Commissioner (Appeals), New Delhi allowed the appeal of the party by setting aside the Assistant Commissioner's order. The party had debited Rs. 15,159/- under protest pending their appeal. The present appeal challenges the rejection of the refund claim by the Assistant Commissioner on the ground of time bar. The appellants contended that the debit was made under protest, complying with Rule 233B, even though a letter of protest was not filed with the Assistant Commissioner. The Tribunal noted that the refund became due to the appellants as a result of the Commissioner (Appeals) order, which allowed the Modvat credit. The Tribunal held that the conditions of Rule 233B were substantially complied with as the appellants detailed their protest grounds in the appeal before Commissioner (Appeals), ultimately succeeding. Citing the Supreme Court judgment in the Mafatlal case, the Tribunal emphasized that duties paid under protest should be deemed as such to enable the assessee to file fresh applications under Section 11B(2) as per the Excise Act. Consequently, the Tribunal set aside the lower authority's decision and allowed the appeal with consequential relief.

Rejection of refund claim on the ground of time bar:
The Assistant Commissioner rejected the refund claim of Rs. 15,159/- on the basis that, in the absence of a valid letter of protest, the refund was time-barred under Section 11B. The Commissioner (Appeals), Jaipur upheld this decision, leading to the present appeal. The appellants argued that the debit made under protest, evidenced by the appeal filed before Commissioner (Appeals), satisfied the requirements of Rule 233B, despite not filing a formal letter of protest with the Assistant Commissioner. The Tribunal found that the rejection of the refund claim on the grounds of time bar was invalid. It held that the appellants' compliance with the essence of Rule 233B by detailing their protest grounds in the appeal before Commissioner (Appeals) was sufficient. Relying on the Supreme Court's interpretation in the Mafatlal case, the Tribunal emphasized the importance of deeming duties paid under protest to facilitate the filing of fresh applications under Section 11B(2) in line with the Excise Act. As a result, the Tribunal set aside the lower authority's decision and allowed the appeal, providing consequential relief to the appellants.