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TMI Blog2002 (1) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Assistant Commissioner on 14-2-1992 stating that their claim is not hit by bar of limitation as they all along paid duty under protest. However, the Assistant Commissioner did not sanction the claim for Rs. 29,80,997/-. 2. Both the authorities did not dispute the above fact about protest have been filed by the appellant vide their letter dated 9-7-85. However, the revenue has taken a stand that the said letter of protest was to inform the Department that they would be paying the duty of sub-standard craft paper under protest, adopting the approved value. The Revenue has taken a stand that the protest under Rule 233B is regarding to valuation of sub-standard craft paper and not with regard to captive consumption claim and benefit of Notification No. 217/86. The finding recorded by the Commissioner in para 6 to 8 is reproduced :- It has to be examined whether the refund claim is time barred in the light of the above background. The protest made under 233B of CE Rules is with reference to valuation of the goods. The question of dutiability of sub-standard craft paper captively consumed was never a subject matter of protest. In the case of CCE v. Chennai Bottling Company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd show cause notice also clearly admits about the letter of the protest alleged by them which is withdrawn in time. He also relied on the judgment of the Tribunal in CCE v. TVS Suzuki as reported in 2001 (135) E.L.T. 140 (T) = 1999 (34) RLT 668 to buttress his argument that the claim is not hit by unjust enrichment. 4. Ld. SDR reiterated the Departmental view as per the order given by the Commissioner (Appeals) which is extracted (supra). 5. On a careful consideration of the submissions and perusal of the record, it is seen from the show cause notice, dated 8-10-1993 that the Department has not challenged the letter of protest filed by the appellant. The charge made out in paras 2 to 4 of the show cause notice is reproduced :- On the perusal of the refund claim and the correspondence furnished so far, it is observed that the assessee has indicated that from the year 1987 onwards he had paid the Central Excise duty under protest as contemplated under Rule 233B of the CE Rules, 1944. But as per the letter No. V/pg/84-85/30, dated 9-7-85 of the assessee, purported to be an indication of payment of duty under protest, it is observed that they have protest against the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich will have an over all effect and the payment of duty is deemed under protest and is not hit by the time bar in terms of Section 11B of CE Act. Therefore, the finding recorded by both the authorities that the claim is hit by time is not correct and requires to be set aside. Ordered accordingly. 6. Insofar as the plea of unjust enrichment is concerned, we are of the considered opinion that the matter has to go back to the original authority for considering this aspect in the light of the Judgment of Mafatlal Industries case. The appellants shall be heard and if they have any evidence to show that the duty element has not been passed on to the consumer, then the same is required to be produced to satisfy that the refund is not hit by unjust enrichment. Thus the appeal is disposed of on the above terms. Sd./-(S.L. Peeran)Member (J) 7. [Contra per : Jeet Ram Kait, Member (T)]. - I am not able to persuade myself to agree to the order proposed by my ld. Brother Shri S.L Peeran, Member (Judicial) for the reasons recorded in the succeeding paragraphs. 8. The question that arises for consideration is as to whether the protest letter dated 9-7-85 in which question of dutiability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. In the meanwhile the Department approved the Price List (PL) filed by the appellant for second grade kraft paper in accordance with the decision of the Commissioner in his order cited above. The approval accorded was final. Under these circumstances, the appellants, vide their letter dated 9-7-85, informed the Department that they would be paying the duty on sub-standard kraft paper under protest, adopting the approved value. This protest is under Rule 233B of C.E. Rules and is sent to the Department under Registered post. Thus, there appears to be a protest under Rule 233B. The dispute is regarding the valuation of sub-standard craft paper. The appellants plead that the refund claim is not time barred as duty was paid under protest, valuation of the goods being the dispute. 5. The present claim is made on a different ground. The appellants claim that they used the sub-standard kraft paper in the manufacture of final product, paper and paper board; that in terms of Notification No. 217/86 duty on sub-standard kraft paper is not leviable as it is captively consumed; that by inadvertence they failed to claim the benefit of Notification No. 217/86; that no duty is leviable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants, being within time. However, he directed the exact duty paid on 14-8-91 be verified and the amount be refunded. He, therefore, observed that the Assistant Commissioner was correct in holding that the refund claim was admissible only in respect of duty paid during the 6 months prior to the receipt of the refund claim in his office and the duty paid earlier to that was hit by bar of limitation. He also held that the Assistant Commissioner was also correct in holding that protest letter dated 9-7-85 was not valid since the protest was not with regard to claiming exemption and applicability of Notification No. 217/86 in respect of sub-standard kraft paper which was captively used in the manufacture of final product. The appellants have also admitted that by inadvertence, they failed to claim the benefit of Notification No. 217/86 and continued paying duty though they were entitled for exemption under Notification No. 217/86, which was claimed by them later by filing a classification list on 12-2-92 for claiming the benefit of exemption under Notification No. 217/86, dated 2-4-86 in respect of the said sub-standard kraft paper after realising their mistake and the Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted/cited certain case laws; (iv) The benefit of exemption under Notification No. 217/86 cannot be denied to them even if not claimed in the classification list, as Section 11B confers an independent right and a substantial right on the assessee to claim refund if it is otherwise permissible in law and the assessee cannot be estopped from claiming the refund merely on the ground that they do not claim the benefit of notification in the classification list; any denial of exemption from duty under exemption notification is to be imposed larger levy on the manufacturer which constitutes a violation of fundamental right of the assessee to carry on trade which is guaranteed to them under Article 19(1)(g) of the Constitution; cited certain case laws; (v) In respect of the period earlier to 1987, they were like-wise eligible for exemption from payment of duty under Notification No. 16/82-CE, dated 28-2-82 as amended, which was in force up to 24-2-87, though the same was not claimed by them due to inadvertence while filing the classification lists for approval and they are also eligible for the refund of excise duty paid for this period; a separate claim is being preferred for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. In the show cause notice dated 8-10-93 it was proposed to reject the refund claim of Rs. 36,90,335.01. The appellants in their reply dated 10-11-93 have very categorically stated that it was due to inadvertence while filing a classification list, they erroneously did not claim the benefit of the Notification No. 217/86, dated 2-4-86, in respect of the sub-standard Kraft paper utilised within the factory in the manufacture of their reel core which in turn is an input in the manufacture of other varieties of paper and paper board. They also submitted that they have filed the classification list with the Assistant Commissioner of Central Excise, Rajahmundry on 12-2-92, claiming the benefit of exemption under the Notification No. 217/86, dated 2-4-86 in respect of the said sub-standard kraft paper after realising their mistake and the Assistant Commissioner approved the said classification list w.e.f. 12-2-92 allowing them the benefit under Notification No. 217/86. They have also pleaded before the Assistant Commissioner that they should not suffer due to inadvertence or mistake committed in not claiming the exemption at proper time and they should review their assessment and the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. has endorsed in the RT 12 returns that the assessment is done as per the provisions of Rule 9B of CE Rules, 1944; and when the assessments are done under Rule 9B, the question of limitation of time will not arise and they have not received any intimation to the effect that the RT 12s have been finally assessed. 12. The Commissioner of Customs Central Excise, Hyderabad in para 4 of his order has discussed the background of the whole matter. The background is that the Commissioner of Central Excise, Guntur vide his Adjudication order No. 9/84, dated 31-10-84 held the assessable value of sub-standard kraft paper should be approved on par with the price of good quality kraft paper. The appellants preferred an appeal against this order. In the meanwhile, the department approved the Price List filed by the appellant for second grade kraft paper in accordance with the decision of the Commissioner in his order cited above. The approval accorded was final. Under these circumstances, the appellants, vide their letter dated 9-7-85, informed the Department that they would be paying the duty on sub-standard kraft paper under protest, adopting the approved value. This protest was under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by him has held that the ruling of the Apex Court rendered in the case of Mafatlal Industries Ltd. v. UOI reported in 1997 (89) E.L.T. 247 (SC) on the aspect of protest is also applicable to the facts of the case, however without recording as to how the ruling of the Apex Court is applicable to the facts of this case. To appreciate the ratio of the judgment rendered by the Hon ble Apex Court in the case of Mafatlal Industries Ltd. (supra), para 85 of the above judgment is relevant where duty has been paid under protest within the scope of Rule 233B of the Central Excise Rule, 1944. The Hon ble Apex Court in para 85 of the above judgment has held that the Rule no doubt requires the assessee to mention the grounds for payment of the duty under protest but it does not empower the Proper officer, to whom the letter of protest is given, to sit in judgment over the grounds. The Hon ble Apex Court has also held that the assessee need not particularise the grounds of protest and it is open to him to say that, according to him, the duty were not exigible according to law. All that the proper officer is empowered to do is to acknowledge the letter of protest when delivered to him a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case. Similarly, the judgment rendered by the Apex Court in the case of Executive Engineer, Workshop Division, M.P. Electricity Board v. CCE, Raipur reported in 1997 (94) E.L.T. 445 (SC) is also not applicable because in the case of M.P. Electricity Board they were informed by the Inspector of Central Excise that on introduction of Item No. 66 of the erstwhile CE Tariff, duty @ 1% ad valorem had been imposed on the goods manufactured by the said workshop and the workshop was required to take on L4 licence. They were also asked for particulars of the goods produced and cleared since 1-3-1975 with the object of raising duty demand. In reply, the workshop disputed the duty liability on the grounds that it was fabricating transmission line towers etc. in connection with the power supply in the State of Madhya Pradesh. However, they submitted an application for licence under protest. It is on this protest the Hon ble Supreme Court held that the Inspector s letter and workshop s reply ought to be read together and not in isolation. So read, the workshop's letter must be construed to mean that protest was lodged therein both against obtaining the licence as well as against liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances made in the meantime are to be deemed provisional even if B13 bond not executed but personal ledger account maintained. Whereas, in the present case, the time bar has been made applicable only for the period prior to the date of filing of the classification list which was received in the Office of the Assistant Collector on 14-2-92 and the period of 6 months was computed from that date. Therefore, both the lower authorities have followed the judgment rendered by the Apex Court in the case of Samrat International supra. I have also to observe that CEGAT s Judgment rendered in the case of CCE, Chennai v. TVS Suzuki Ltd. 2001 (135) E.L.T. 140 (T) is also not applicable to the facts of this case because this duty was not as a result of adjustment under Rule 9B(5) of the Central Excise Rules, 1944, where the provisions of unjust enrichment contained in Section 11B of the Central Excise Act, 1944 are not to apply. Whereas in this present case, the duty has been paid by them erroneously under the mistaken notion of law that they were required to pay duty. Therefore, the appellant s contention that the judgment rendered by CEGAT in the matter of CCE, Chennai v. TVS Suzuki Ltd., 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference of opinion between ld. Member (Judicial) and ld. Member (Technical) noted in miscellaneous order No. 1/2002, dated 3-1-2002 in Appeal No. E/1213/96. 20. The facts of the case have been noted by ld. Brothers in their respective orders. However, for my purpose, I shall pen down the relevant facts minimally. The appellants, engaged in the manufacture of paper and paper board, had paid duty of excise on certain quantity of sub-standard craft paper consumed captively in the manufacture of their final products, during the period 7-3-87 to 17-1-92. They had done so because they were, allegedly, unaware of the fact that the goods so captively consumed were eligible for exemption under Notification No. 217/86-CE. On 12-2-92, the appellants filed a classification list with the proper officer of the department claiming the benefit of the Notification in respect of the said goods, and that classification list was approved by the Assistant Collector. On 13-2-92, the party filed a claim for refund of Rs. 36,90,335/- (duty paid on the goods in question, for the aforesaid period). The department, by show cause notice dated 8-10-93, proposed to reject the claim on the ground of time-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise had made endorsements on the appellants' RT 12 returns for the relevant period to the effect that the assessments were provisional under Rule 9B of the Central Excise Rules, 1944 and as there has never been any finalisation of the assessments under Sub-Rule 5 of Rule 9B, the assessments have ever remained provisional and consequently the time bar provisions of Section 11B were not applicable to the refund claim in question. Counsel has pointed out that this plea, raised in the reply to the show-cause notice, has not been touched by the adjudicating and first appellate authorities. It has been further submitted by ld. Counsel that the departmental officers were not expected to inquire into the grounds of the protest under Rule 233B. The factum of protest, regardless of its character, was enough to exclude the applicability of the limitation provisions of Section 11B. She has drawn support to this argument from the Supreme Court s ruling contained in para 85 of the judgment in Mafatlal Industries case (supra). It has been further argued that the decision of the Madras High Court stands impliedly overruled by the Apex Court s ruling in the case of Mafatlal Industries (supra). 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty was entitled to the exemption under the Notification even for a period prior to 12-2-92. The Revenue is estopped from contending that the assessee was not entitled to the benefit of the exemption notification for any period prior to 12-2-92. If such exemption can be granted for the aforesaid period (15-8-91 to 14-2-92) without insisting on specific claim therefore, it could very well be granted for any prior period, subject to statutory limitation, if any. The only surviving issue arising for consideration is whether the protest registered by the assessee under Rule 233B in 1985 in relation to valuation of the goods can be treated as a protest based on the ground of exemption from duty. This question is squarely covered by the Apex Court s ruling contained in para 85 of the judgment in Mafatlal Industries, wherein it has been categorically held that the proper officer of the department is not to sit in judgment over the grounds of protest under Rule 233B and that the assessee is not liable under that rule to particularise the grounds of protest. It would follow from this ruling of the Apex Court that a protest with particular reference to valuation as in the appellants letter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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