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TMI Blog1990 (4) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ines which stood exempted from payment of duty under Tariff Item 68 and as such, they were entitled to refund of duty paid during the period from 1-3-1975 to 28-2-1978 under compulsion and protest. 3. The Assistant Collector rejected the claim by his order-in-original dated 26-12-1984 on the ground of merit as well as on time-bar basing on the reasoning that the Calcutta Collector's aforesaid order dated 31-1-1983 merely decided that the products (mentioned therein), cleared during the period from 1-3-1978 to 30-6-1982, were Ayurvedic medicines falling under Tariff Item 68 and hence were exempted from central excise duty under Notification No. 62/78 dated 1-3-1978. This order has no relevance to the earlier period (i.e. prior to 1-3-1978) to which the instant refund related. The assessee filed the classification list No. 1/75 and 1/77 declaring their Ayurvedic medicines as falling under Tariff Item 68 which stood as proved by the Assistant Collector. They did not dispute the said classification as well as the excisability of the subject goods during the material time. Even before the incorporation of the explanation to the Tariff description of Tariff Item 68 which stood effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Ayurvedic medicines under Tariff Item 68 in terms of Rule 173-B without mention of protest on the body of those documents. The Assistant Collector of Central Excise had approved them. They had paid duty on those goods basing on the said forms during the period from 1-3-1975 to 28-2-1978. The Collector has further observed that the appellants did not file any appeal under Section 35 read with the then Rule 213 before the Appellate Collector of Central Excise within 3 months against the approval of such classification. Therefore, he held that the appellants had accepted the order of approval of classification. Therefore he has observed that the classification of the products under Tariff Item 68 stood valid and final and did not stand revoked at any time by any High Court/Judicial authority and claiming refund of duty paid earlier in pursuance of the said classification order, is not legally correct and permissible. He has observed "as the cause of the disease did not stand eradicated in time, the consequential sufferings are now beyond the scope of any legal remedy". He has further observed that the appellants continued to pay duty on the instant goods till 28-2-1978 and stopped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of incorporation of 'explanation' to Tariff Item 68 w.e.f. 19-6-1980 by the Finance Bill, 1980. 8. On the second question, the Collector has stated that the refund claim is time-barred. He has observed that the expression "payment under protest" was required to be predominantly within an all clearance documents i.e. ARI, GPI, PLA, etc. even prior to 1-6-1981 when Rule 233 was introduced. He has also observed "so far entitlement of being regarded as a protest claim concurrently with payment of duty under protest, there must exist some clear documentary evidence indicating beyond any shadow of doubt that the duty was being paid under protest on some concrete, specific and stated ground. But a close reading of their letter dated 15-3-1975 does not give any clear indication to that effect. That letter appears to be the assessee's self-opinionated letter written with a view to exploring the possibility of their products coming under excise net probably consequent upon introduction of Tariff Item 68 by the 1975 budget. It is evident that in the 1st to 2nd, 27th to 32nd and 62nd to 67th lines of the said letter dated 15-3-1975, they have emphatically asserted that their ayurvedic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund has to be allowed. He submitted that the ayurvedic medicines were not attracted to duty during the period 1-3-1975 to 28-2-1978. He further submitted that the term "not elsewhere specified" was specific to exclude ayurvedic medicines from liability of duty under Tariff Item 68. He further submitted that ayurvedic medicines were not excisable during the material time and hence the period of limitation under Rule 11 read with l73-J was not applicable in this case. He further submitted that the Department had obtained the declaration in Form I in 1975 under coercion by the officers which according to him, is evident from the Superintendent's letter dated 19-4-1975. However, he admitted that the appellants had no evidence to show or of any further correspondence on the subject with the excise authorities. He also admitted that the appellants did not have any records to show that the classification list was filed under protest and whether the challans, ARI, Gate Passes, PLA etc. were marked "under protest". He wanted the Bench to hold the letter dated 15-3-1975 as letter of protest and in support of his contention, he relied upon the citation of Supreme Court given in 1989 (41) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that there should have been a protest setting out the reasons therefor". Therefore, he submitted that in both the rulings relied by appellants, the Supreme Court and Tribunal had taken the entire facts and circumstances in those cases and had come to the conclusion that indeed there was payment under protest. While in the instant case, except the disputed letter, the facts and circumstances of the case indicated in the order of the Collector (A), do not disclose that the appellants had indeed made the payment under protest. He has brought forth the contradictions in the appellants' stand as set out in the Collector's findings. He submitted that as there was no protest in this case, the refund claim of the appellants is time-barred. 16. We have heard both the sides, gone through the facts and circumstances of the case and also the documents and citations. The question that arises for our consideration is whether the letter dated 15-3-1975 was in fact a letter of protest by the appellants and whether the appellants, in fact, proved that they had made the payment under protest and whether the refund claim is barred by time. We have extracted in detail the Collector's findings with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty in respect of their consignment under protest as to entitle him to get the benefit of the proviso of Section 27 of the Customs Act" and again in the same para the Court observed that "Involuntary payment and 'payment under protest' are not the same thing. For imposition of unjust duty one may be compelled to make payment and such payment will then be involuntary, but every involuntary payment cannot be held payment under protest within the meaning of proviso of Section 27 of the Customs Act." 17. Viewing from this point of view also, as observed by us, the appellants have not shown anything except this letter dated 15-3-1975, which has been considered as 'Self opinionated letter' by Collector that duty had been paid under protest. As such, we are in agreement with the views of the Collector and hold that the order of the Collector is not vitiated by any illegality to call for any interference from our end. As such this appeal is dismissed. [Order per: G. Sankaran, President]. - 18. I have carefully perused the order prepared by learned brother Shri Peeran but regret that I am unable to agree with the conclusion. As such I am recording a separate order. 19. The whole poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts it is established beyond doubt that the Ayurvedic medicines manufactured by us are not subjected to any new Excise Duty". 21. The Superintendent's letter dated 19-4-1975 (page 94-95 of the paper book) to the appellants does not, of course, refer to their letter dated 15-3-1975. But as we have noted earlier the said letter has evidently been received by the addressees because it has come in for extensive comments in the orders of both the lower authorities. The Superintendent's letter refers to his earlier letter dated 19-3-1975 advising the appellants to apply for L4 licence for manufacture of goods not elsewhere specified, that is, of goods falling under Item No. 68 and asking them to file classification lists. While advising the appellants to comply with the said instructions and not to take any clearance of goods falling under Item No. 68 without payment of duty the Superintendent says :- "Please note that the undersigned will be compelled to take coercive measures against you in case of your failure to comply with the aforesaid instructions within 2 days of receipt of this letter". 22. The appellants' letter dated 15-3-1975 and the Superintendent's letter dated 19-4-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 15-3-1975 argues at length that the goods manufactured by them did not attract excise duty either under Item No. 14E or under the new Item No. 68. Following the principle emerging from the Supreme Court's judgment, I have no hesitation in holding that the appellants' letter did constitute a letter of protest and that duty payments made thereafter must be deemed to have been made under protest. In this view of the matter, I hold that the bar of limitation would not apply to the appellants' claim for refund of duty. 25. However, it would not necessarily follow that the claim is automatically admissible. The Tribunal had occasion to go into the classification and dutiability of some of the products manufactured by the present appellants in its order No. 438-439/85-C dated 7-6-1985 reported in 1985 (22) E.L.T. 844. In disposing of the claim on merits, the settled position in law [see Gujarat High Court judgment in Darshan Hosiery Works 1980 (6) E.L.T. 390 (Guj.)] has also to be kept in view. According to this judgment, the expression 'not elsewhere specified' used in Item No. 68 means total omission or failure to specify either for the purpose of taxability or for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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