Payment of duty under protest - Central Excise Practice Manual (OLD) - Central Excise

PAYMENT OF DUTY UNDER PROTEST Where the duty is paid under protest, provision regarding the limitation of one year period prescribed for making application for refund of duty from the relevant date (section 11A or 11B) shall not apply. Where the assessee is not satisfied about the adjudication order, he may pay duty under protest till the appeal is settled. The main advantage of paying duty under protest is that, if the case is decided in favour of assessee, the duty paid under protest can be obtained as refund subject to not having passed on the same to the buyers [doctrine of unjust enrichment is applicable]. The procedure followed in cases where duty is paid under protest is as follows: 1. The assessee should write a letter to the AC/DC giving reasons for payment of duty under protest and get dated acknowledgement. 2. All invoices and monthly/quarterly returns should be marked with 'Duty paid under protest'. 3. An assessee can pay duty under protest from the time of submission of application till the appeal is decided. Thus assessee cannot pay duty under protest after the appeal is decided or after the expiry of appeal period if does not file the appeal within the stipulated period. 4. If lump-sum duty is paid in respect of past demands, fact of duty payment under protest should be mentioned in PLA, Cenvat credit account and Daily Stock Account. Other issues Refund can be granted only for the issues for which letter of protest is filed. Thus letter of protest can be applied only to future clearances and cannot cover past period. Filing appeal itself is payment of duty under protest. When appeal is pending, pre-deposit of duty is payment of duty under protest. Filing of separate letter of protest is not necessary. Payment made pursuant to demand and threat made by excise is treated as payment of duty under protest.