Customs, Excise and Gold Tribunal - Delhi
Alpha Electrical Products vs Collector Of Central Excise on 26 May, 1987
Equivalent citations: 1987(12)ECR805(TRI.-DELHI), 1987(30)ELT752(TRI-DEL)
ORDER M. Santhanam, Memebr (J) 1. The Appeal is against the order passed by the Collector (Appeals) Central Excise, Calcutta dated 19-11-84. 2. For the purpose of understanding the controversy certain facts have to be set out. The Appellant is engaged in the manufacture of domestic electrical appliances falling under Item 33C of the Central Excise Tariff. Duty on domestic electrical appliances was introduced with effect from 1-3-69. The Appellants obtained Central Excise licence in respect thereof. In 1967 and again in 1969, in the course of their normal trade the Appellants entered into an agreement with M/s. Bajaj Electricals Ltd., Bombay. The Departmental officers were under the belief that the selling price of M/s. Bajaj & Company should be deemed to be the assessable value and the Appellant had to pay the duty as such. Sometime in 1973 the Appellants approached the Asstt. Collector and wanted him to consider that the value for assessment should be their sale price to Bajaj & Company and not the sale price of Bajaj & Company. The issue remained undecided and no approval of the price-list effective from 1-7-75 was forthcoming. The Appellants by their1 letter dated 3-7-75 requested that pending decision of the dispute as to the assessable value they would be clearing the goods on payment of duty on the selling price of Bajaj & Company 'under protect'. The Appellants also requested for early approval of their price-list. They started paying duty under protest by marking the G.P.I. with the words "under protest". On 4-8-75, in reply to a representation made by the Appellants on 21-6-75, the Superintendent informed the Appellants as follows :- "The matter is receiving attention and you will be informed in dye course". In September, 1975 the Appellants again requested the Asstt. Collector to accord early approval of their price-list. The Appellants requested the Asstt. Collector to consider the said price-list effective from 1-7-75 as effective also from 1-10-75. The Range Superintendent returned the price-list unapproved with an endorsement that the price for Bajaj brand domestic electrical appliances should be submitted in the prescribed proforma in Part IV. He was of the view that the price at which such goods were sold by M/s. Bajaj should be deemed to be the value for the purpose of assessment. On 25-10-75 the Appellants reiterated the earlier doubts and requested the authorities to issue a speaking order to enable the Appellants to pursue the matter in appeal. The Department did not settle the dispute at that stage and insisted on the Appellants' compliance with the directions of the Range Superintendent. The Appellants filed subsequent price-list under protest and sent the price-list with covering letters indicating therein that the price-lists were filed without prejudice to their contention regarding the assessable value. About eight price-lists, as enumerated in Para 12 of their Appeal Memoranda were also filed with covering letters recording the protest earlier made. It is alleged that the Appellants were coerced by the Department to submit price-list in Part IV declaring the selling price of Bajaj. The R.T.12 returns were also mechanically assessed on the same basis. 3. On 23-7-80 the Appellants approached the Asstt. Collector for accepting their selling price to M/s. Bajaj as the value for purposes of assessment. They also sought payment of duty provisionally under Rule 9B of the Rules. On 12-8-80 the Asstt. Collector accepted the Appellants' contention and held that the duty was payable on the selling price of the Appellant to M/s. Bajaj & Company. Orders were passed by the Asstt. Collector on 27-8-81 approving the price-list No. 2/80 dated 23-7-80 holding that the price at which the products were sold to Bajaj should be treated as the normal price for the purpose of assessment of duty. The Range Superintendent was informed through the endorsement that he should finalise the pending assessments accordingly within a fortnight and report compliance. 4. The Appellants submitted a refund claim on 16-8-82 claiming refund of Rs. 9,66,990.10 covering the period 3-7-75 to 22-7-80. The Asstt. Collector by the Order-in-Original dated 31-5-8* held that the order passed in respect of price-list 2/80 was relevant for the period from 23-7-80 only. He held that although the Appellant company had submitted price-lists under protest and clearing the goods on payment of duty under protest, the fact remained that they did not appeal against any of the approval of the price-list nor the assessment of R.T.12 returns therefrom. It is observed in the order that if the assessee was aggrieved with such an approval and of the assessment of the R.T.12, he should have filed an appeal to the appellate authority under the then Section 35 of the Central Excises & Salt Act, 1944. Having not done this, the orders of approval of the price-list and the assessment of the R.T.12s having not been invalidated till that date, the claim was rejected. 5. The Appellants preferred an appeal to the Collector (Appeals), who held as follows :- "Whatever it may be, the price list pertaining to the period 3rd July'75 to 22nd July'8O having been duly approved and such approval remaining the same without being altered or rescinded or set aside, the question of granting them a refund of a portion of the excise duty paid by them during the period does not arise." The appeal was rejected. Hence the present proceedings. 6. Shri N. Mookherjee drew our attention to the main facts of the case. He relied mainly on the following circumstances :- (1) The payment of duty was under protest. This fact could be gathered from the endorsement in the price-list and also in the G.P.I. (2) On 4-8-75 in reference to a representation made by the Appellants on 21-6-75, the Superintendent has intimated that the matter was receiving attention and the Appellants would be informed in due course. It is urged that this categorical statement by the Department would show that the matter was not finally decided one way or the other. (3) The price-list were submitted at the direction of the Department in Part IV; which would show that the Appellants had no other alternative. When the Appellants sought to file the price-list No. 1/75 in Part I, the Department insisted that it should be in Part IV and hence price-list 2/75 was filed on 6-12-75 under protest. Since there was assurance by the Department that the matter was receiving attention, the Appellants filed the price-list 2/75 and the subsequent price-lists as desired by the Department. (4) No appeal was preferred by the Appellants in view of the earlier assurances by the Department that the matter was receiving their attention. 7. He urged that from the endorsement in the price-list, it would be clear that the assessments were not finalised by the Department. All the price-lists were filed with letters of protest and without prejudice to the main contention of the Appellants regarding the assessable value. Rule 173(C)(2)(B) provided for payment of duty under protest. 8. In 1982 (10) ELT 591 the Government of India in the case of Bijli Products (India) Pvt. Ltd., has held that merely because the Petitioners did not file an appeal against the approved price-list, they are not estopped from filing a refund claim later if they felt that the refund was due to them. IN 1986 (26) ELT 553 [Andhra Cement Company Ltd. v. Collector of Central Excise, Guntur] the South Regional Bench has held that the letter of protest saved a claim covered by the protest from the operation of time bar. 9. Shri Rajhans, J.D.R., stated that he had nothing further to add than what was stated in the orders below. He reiterated that no appeal was filed against the approved price-list and the matter had attained a finality. The order passed in respect of price-list 2/80 cannot have any retrospective operation in regard to the earlier price-lists. 10. The point for consideration in this Appeal is whether the Appellants are entitled to the refund claim. 11. It is seen from the narration of facts set out above that there was a dispute in regard to the assessable value of the clearances right from 1975. The Department was contending that the sale price of M/s. Bajaj should be assessable value as against the plea of the Appellants that their selling price, to M/s. Bajaj alone should be taken into consideration. The Appellants have, in their letter dated 21-6-75 have categorically affirmed that stand to the Department. In reply to this letter, the Department has intimated the Appellants that the matter was receiving attention and the Appellants would be informed in due course. The subject of that letter is as follows :- "Transfer prices - approval of, for payment of Central Excise duty - Reg." From this letter it is manitest that the Department did not treat the matter as closed or reached the stage of finality, but treated it as a case pending their decision. In this background there is considerable force in the contention that the Appellants were left with no other alternative than to make the payment for their clearance at a higher value. The filing of two price-lists - one in Part I and the other in Part IV for the same clearances establishes the contentions of the Appellants. 12. The Appellants having paid the duty under protest and as the matter was considered to be pending with the Department for their ultimate decision, one can safely conclude that the decision passed in respect of Price-List 2 of 1980 would govern the earlier price-lists also. We also notice that there is an endorsement to this order directing the Superintendent to finalise the pending assessments accordingly within a fortnight and report comp liance'. This endorsement would show that the assessments were considered tentative and not final. If the assessments had been completed as contended by the Revenue, this endorsement cannot be reconciled. The Department has treated the matter as pending and the price-list from 1/75 till the one filed under 2/80 should, therefore, be finalised in accordance with the decision rendered in respect of Price-list 2/80. 13. In this view, the Appellants would be entitled to the refund claimed by them. There is no dispute about the payment, the period or the quantum of refund. The only ground on which the Department rejected the refund application, was that the earlier price-list had been approved and that the Appellants had not filed any appeal. This contention does not stand scrutiny. Firstly, reservation in the earlier directions would establish that the prior assessments were only tentative and not final. Secondly, the Department itself has written the letter dated 4-8-75 in which they had assured to communicate their decision in due course. The only decision communicated was the order in respect of price-list 2/80 and this would apply to the earlier price-list also. Thirdly, the Appellants had paid the duty under protest. The term 'under protest' has got a legal significance. The value of the phrase "under protest" is to safeguard the position of the person who makes the payment and to ensure that it will not be said that the payment he made was a voluntary one. The price-lists had been filed under protest with a covering letters setting out the grounds of objections and G.P.I. had remarks that duty was paid under protest. Fourthly, Section 1 1B contains a proviso that the limitation of six months would not apply where any duty had been paid under protest. Rule 11, as it stood prior to the 15th amendment of the Rules, 1980 also contains a similar provision. Rule 173(C), now 173(C)(8) provided for an assessee disputing the price list to pay the duty under protest on the basis of the price-list approved by the officers. When a protest is made it is the duty of the officer to conduct an enquiry and give his findings either approving the protest or rejecting the same. On the facts of the case it cannot be denied that no orders, have been passed by the Department in respect of the protest made by the Appellants right from 1975 to 1980. 14. We also find considerable force in the contention of Shri N. Mookherjee that the orders passed in this case could not be treated as final orders because no show cause notice was issued to the Appellants before the approval of the price-lists. The protest in the price-lists was not considered. The determination of assessable value of the goods is a quasi-judicial function and an opportunity should have been afforded to the Appellants of being heard before the orders were made. So, the decision on the price-lists without adjudicating on the applicability of the protest cannot operate as a bar to consider the claim for refund by the Appellants. 15. We also notice that there is a decision reported in 1985 (22) ELT 522(Tri) [Collector of Central Excise, Calcutta v. Stewarts & Lloyds of India Ltd., Calcutta]. That was the case where the Department claimed that the company did not file any appeal or refund petition against the classification and continued to pay duty on and from 1-3-1975 under protest though without formally appealing against the classification list with which they were aggrieved. The matter came up again for consideration and was finally decided by an order dated 14-8-1980. When a refund was claimed for the period 1-3-1975 to 30-3-1981 the Asstt. Collector sanctioned the refund from 14-8-1980 to 30-3-1981 (i.e. from the date when the matter was finally decided). The Appellants challenged the order before the Appellate Collector, who set aside the order of the Asstt. Collector with an instruction to grant refund in full. The Collector of Central Excise, Calcutta, filed an appeal before the Tribunal and the Tribunal held that the Respondent (assessees) protested as early as March, 1975 that the goods were liable to duty and they were allowed to pay duty under protest. There was no evidence that the protests were ignored or the Respondents were informed to appeal against the classification list. Relying on 173(B)(3) the Tribunal stated that it contained a clear provision for payment of duty under protest at the rates aproved by the officer and Sub-rule (5) stipulated that when the dispute about the duty had been finalised, the proper officer shall make such modification and inform the assessee accordingly. The Tribunal also observed that by Rule 173J in force prior to 1980 Rule 11 was applicable to refunds, and since 1977 the Rule provided that limitation shall not apply where the duty had been paid under protest. It is stated "this later provision only expressly made clear a principle that a protest lodged simultaneously with payment of duty was tantamount to claiming a refund." As the facts of the present case are almost identical, we follow the ratio of the earlier decision. Since the payments have been made under protest and the matter remained unsettled even according to the Department, it would not be legal or proper to hold that the protest should be ignored since no appeal was filed against the approval of the price-list. We accept the contentions of the Appellants and allow the Appeal with consequential relief. H.R. Syiem, Member (T)
16. The Assistant Collector says in his order No. 36/33C-AC/Cal-XV/84, dated 31-5-1984 - "since the duty was paid under protest the claim submitted by the said company is not time barred under Section 1 1B of the Central Excises and Salt Act, 1944". He records again that "Although the said company submitted such price-list under protest and cleared the goods on payment of duty under protest the fact remains that he did not appeal against any of the approval of the pricelist nor the assessment on RT-12 returns and therefore, the legal position is that the pricelist as approved and the RT-12 returns as assessed remains valid till date since the order have not been set aside by the any higher authority".
17. This is clear evidence that the payment was under protest and that the claim would not be time barred. The only objection of the Assistant Collector was that the assessee did not appeal against the approval of the pricelist or assessment of the RT-12 returns and so, according to him, the legal position was that the pricelist as approved had not been set aside by any higher authority. This is not the correct legal position. If a man files a pricelist or RT-12, a classification list etc.. and pays duty according to such documents, but later on discovers that he had paid more duty than he should have paid, the law provides that he can ask for refund under Section LIB; that is the law. It matters nothing that he had not appealed against the pricelist or the classification list or the RT-12 returns and it matters nothing if he himself filed the pricelist, if he himself gave the assessment, and he himself paid higher amount of duty, or that the proper officer had approved all these. If he files a refund claim and if, in accordance with the law, the refund claim is valid and correct, and is not hit by time bar, then the excess money taken from him as duty must be refunded. Nothing that he had done or had not done in the past estops him from claiming refund and if the claim is in order, the department is bound by law to return that money.
18. I can never accept the position that because the approval of the pricelist went unchallenged or because the RT-12 returns have been finalised, the appellants could not claim and were not entitled to, any refund. The only thing that disentitles an assessee's claim for refund is if the refund itself suffers from any shortcoming or illegality, and or if it has no merits. But if it has no illegality and if it has merits in it, such as that the assessment under which duty was recovered was wrong while the assessment claimed by the assessee is right, then the department has no alternative but to pay the refund. This is the clear position under the law and I direct refund to be given.