2013 (2) TMI 441 - AT - Central Excise

Refund - Duty paid under protest - Whether limitation u/s 11B is invokable, where duty has been paid under protest and the said protest has not been vacated by a speaking order - Limitation under section 11B - Held that - Following the decision in case of FINE COMPOSITE PVT. LTD. (1995 (1) TMI 211 - CEGAT, BOMBAY) wherein duty has been paid under protest and the said protest has not been vacated by a speaking order. In that case, limitation of Section 11B of the Central Excise is not applicable. In favour of assessee

Summary

Issues:
Interpretation of Section 11B of the Central Excise Act, 1944 regarding limitation on refund claims when duty is paid "under protest" without a speaking order vacating the protest.

Analysis:

Issue 1: Interpretation of Section 11B of the Central Excise Act, 1944

The appeal before the Appellate Tribunal CESTAT CHENNAI involved a dispute where the respondents had paid duty "under protest" between July 2000 to July 2002. Subsequently, upon a clarification by the Board for excess payment of duty, the respondents filed refund claims. The adjudicating authority rejected the refund claims citing limitation under Section 11B of the Central Excise Act, 1944, as the claims were filed in May to June 2004, beyond the prescribed period. The Commissioner (Appeals) allowed the respondents' appeal, leading to the Revenue's appeal before the Tribunal.

Issue 2: Application of Limitation under Section 11B

The core issue for determination was whether the limitation under Section 11B of the Central Excise Act, 1944 applies when duty is paid "under protest" without the protest being vacated by a speaking order. The department argued that an amendment to the law automatically vacates the protest lodged by the assessee. Conversely, the respondents relied on a precedent set by the Tribunal in the case of Fine Composite Pvt. Ltd. Vs Collector of Central Excise, Bombay-II (1995), where it was established that if duty is paid under protest and the protest remains unvacated by a speaking order, Section 11B's limitation does not apply.

Tribunal's Decision

After considering the arguments from both sides and the precedent cited by the respondents, the Tribunal concurred with the position that when duty is paid under protest and the protest is not vacated by a speaking order, the limitation under Section 11B of the Central Excise Act, 1944 is not triggered. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the decision of the Commissioner (Appeals) in favor of the respondents.