Customs, Excise and Gold Tribunal - Delhi
C.C.E. vs Pepsi Foods Ltd. on 22 February, 2000
Equivalent citations: 2000(70)ECC93
ORDER A.C.C. Unni, Member (J)
1. This Revenue appeal has been filed against the Order of the Commissioner of Excise, Chandigarh dated 8.2.99 allowing the respondents refund claim of Rs. 20,53,017 out of an amount of Rs. 50 lakhs pre-deposited by them after adjusting duty payable on the royalty charges collected by them during the period in question. The refund claim arose consequent to the Tribunal decision dated 18.10.95 setting aside the duty demand or advertisement expenses. The respondents had pre-deposited the amount of Rs. 50 lakhs on 6.12.94 for the purpose of complying with the provisions of Section 35F of the Central Excise Act, 1944. Consequent to the Tribunal's order setting aside demand of duty on advertisement expenses, they claimed refund with the jurisdictional Assistant Commissioner on 26.11.96. The Assistant Commissioner rejected the refund claim on the ground that the appellants had not paid the duty under protest and had not followed the procedure laid down in Rules 233 B of the Central Excise Rules and also for the reason that the refund claim has been filed after the expiry of six months from the date of payment of duty. While allowing the appeal filed by the assessee, Commissioner (Appeals) relied on paragraph 86 of the Apex Court judgment in Mafatlal Industries v. UOI .
2. Shri Mewa Singh, Ld. SDR appearing for the appellant Commissioner submits that the procedure for refund claim was governed by Rule 233B which stipulates that where an assessee desires to pay duty under protest, he has to deliver to the proper officer a letter to that effect and give grounds for payment of duty under protest and obtain a proper acknowledgment for the letter. No refund of any amount can be granted in case of assessee not following the provisions of Rule 233 B. Inasmuch as the Commissioner (Appeals) has sanctioned the refund in the instant case where the respondents had not complied with the requirement of Rule 233 B, the impugned order was not legal and proper and needed to be set aside.
3. Shri Pragyan Sharma, Ld. Counsel for the respondents submits the provisions of Rule 233 B were not attracted in a case where the refund claim arose out of the Tribunal order and where the claim of refund relates to an amount pre-deposited pursuant to Tribunal order under Section 35 F. He relies on the following case law in support:
1. SM. Enterprises v. CCE
2. Vijendra Trading Co. v. CCE
3. K.S. Steel Works v. UOI
4. CCE v. Enzo Chem Lab. Pvt. Ltd.
5. Suvidhay v. UOI
4. We have considered the submissions and perused the case law. We observe from para 86 of the Apex Court judgment in Mafatlal Industries case (supra) that the Apex Court has clarified that when a duty is paid under orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise) pending an appeal/reference/writ petition, it will certainly be a payment under protest; in such a case, it is obvious, it would not be necessary to lodge the protest as provided by Rule 233 B. We further observe that in Vijendra Trading Co. (supra), the Tribunal had considered an identical question, viz, the refund claim of an assessee of an amount of pre-deposit made during the pendency of the appeal. The question arose whether the refund of the said amount can be granted in the absence of the duty payment having been made without a formal registration of protest under Rule 233. It was held that the time limit of the Section 11B will not be applicable to a case where the refund claim relates to pre-deposits made under Section 35F. In the case of Suvidhay v. UOI (supra), the Hon'ble Bombay High Court examined the question of allowing refund of certain amounts deposited by the petitioner under Section 35F for availing the right of appeal. The Hon'ble High Court had held "in respect of a deposit made under Section 35F, the provisions of Section 11B can never be applicable. The deposit under Section 35F is not a payment of duty but only a pre-deposit for availing the right of appeal. Such an amount is bound to be refunded when the appeal is allowed with consequential relief." The provisions in Section 35F requiring the appellant to deposit the duty demanded or the penalty levied is clearly in the nature of a pre-condition for filing the Appeal and is intended to discourage frivolous Appeals being filed. Likewise, the proviso to that section vesting a discretion on the Commissioner (Appeals)/Appellate Tribunal to dispense with the deposit subject to such conditions he or it may deem fit to impose to safeguard revenue interest is intended to enable the said authorities to strike a proper balance between the interests of the assessee and the Revenue in the facts of each case.
5. We find that the decisions referred to above and relied upon by the respondents fully support their contentions raised before us. In the light of the aforesaid decisions, we confirm the impugned order and reject the Revenue appeal.