Customs, Excise and Gold Tribunal - Delhi
Ashoka Batteries vs Collector Of Central Excise on 28 May, 1990
Equivalent citations: 1990(30)ECR316(TRI.-DELHI), 1990(50)ELT375(TRI-DEL)
ORDER V. Rajamanickam, Member (T)
1. The appellants have filed four appeals arising out of the following orders-in-appeal.
1. E/1506/86-B1 : Against the order-in-appeal No. 549, 550 and 551 dated 20-12-1985. The order of the Collector (Appeals) in this appeal is with reference to the order-in-original No. 62-63/ACK.II/85 dated 31-5-1985 involving two refund claims for an amount of Rs. 1,57,500.01 and Rs. 37,137.22.
2. E/1507/86-B1: Against order-in-appeal No. 552-CE/KNP/85 dated 20-12-1985. The order of the Collector (Appeals) is with reference to the order-in-original C.No. CE/Int/T.I./31 (2)/80 dated 11-5-1984 involving entitlement of the benefit of exemption under Notification No. 80/80 dated 18-6-1980.
3. E/1508/86-B.1: Against the order-in-appeal No. 549, 550 and 551-CE/KNP/85 dated 20-12-1985. The order of the Collector (Appeals) is with reference to the order-in-original No. 41-42.ACK-II/85 dated 31-5-1985 which involves refund of two amounts - Rs. 1,36,777.35 and Rs. 8,321.75.
4. E/1509/86-B.1: Against the order-in-appeal No. 549, 550 and 551-CE/KNP/85 dated 20-12-1985. The order of the Collector (Appeals) is with reference to the order-in-original No. 36-37. ACK-II/85 dated 29-5-1985 involving two refund claims for Rs. 1,57,541.99 and Rs. 27,825.97.
2. Taking these appeals seriatim, it is seen that the grounds of appeal in Serial Nos. 1, 3 and 4 are similar relating to rejection of the claims for refund as hit by limitation under Section 11-B of the Central Excises & Salt Act, 1944. The Collector (Appeals) while deciding the appeals, has upheld the view that payment of duty under protest is a stage subsequent to the approval of the classification list and the procedure adopted by them for payment of duty under protest was not correct and they should have resorted to provisional assessment.
3. The appellants plead that the classification list filed by them effective from 1-4-1981 claiming exemption from payment of duty on first clearance of Rs. 7.5 lakhs and concessions on next 7.5 lakhs under Notification 80/80 dated 19-6-1980, was not approved till 11-5-1984 for a period of 3 years and in the meantime the appellants paid duty "under protest" and also vide their letter No. AB/30/8791 dated 6-8-1981, they lodged their protest and reserved their right to claim refund of duty paid as per their classification list No. AB/5644 dated 1-4-1981 to the department and they were compelled to pay duty at the full effective rates, pending approval of the classification list. Their claims for refund of duty for Rs. 1,57,500.01 and Rs. 37,132.22 were rejected by the Assistant Collector vide his order dated 31-5-1985, as being inadmissible as in the preceding year in 1980-81, the value of their clearances had exceeded Rs. 15 lakhs (Rs. 14,67,000/- + Rs. 58,209.65) due to inclusion of the refund amount. The order was upheld by the Collector (Appeals).
Similarly, in respect of the appeals in E/1508/86-B.1 and E/1509/86-B.1, the issue being common, the appellants have pleaded for refund of the duty amounts as they have paid duty under protest pending approval of the classification list and that rejection of their claim for refund as being time barred under Section 11-B is not correct and also that their clearances were less than Rs. 15 lakhs and claimed exemption under Notification No. 83/83 dated 1-3-1983.
In their appeal in E/1507/86-B.1, the appellants are aggrieved by the order of the Assistant Collector and Collector (Appeals) in having decided that the amount of refund given to the appellants becomes part of the assessable value.
4. During the personal hearing before the Tribunal, Shri L.P. Dhir, the learned advocate reiterated the above submissions as setforth in the appeal memorandum and each of the appeals related to the claims of refund for the periods specified therein that the claims were not hit by time bar and he relied on the following decisions:-
1. 1989 (44) ELT 744 (Tribunal) : ICEM Engineering Co. (P) Ltd. v. Collec-
tor of Central Excise.
2. 1989 (44) ELT 741 (Tribunal) : E.I.D. Parry (India) Ltd. v. Collector of Central Excise.
3. 1989 (41) ELT 530 (Tribunal) : Collector of Central Excise v. Prestige Engg. (India) Pvt. Ltd.
In so far as these citations are concerned, it was the plea of the learned advocate that the period of limitation will not be appllicable, as duties have been paid under protest.
In respect of the appeals in E/1506/86-B.1 and E/1507/86-B.1, the learned advocate fairly conceded that on the issue of redetermination of the value by recckoning the refund allowed, the matter was covered by this Tribunal's order in their own case in Order No. 101/1989-B.l dated 28-7-1989 and their case was a weak one.
In respect of the appeal in E/1508/86-B.1, he referred to the letter written by the Assistant Collector dated 3-6-1980 wherein the Assistant Collector had directed that clearances should be effected on payment of duty and the appellant's action of clearing the goods on 'nil' rate of duty under Notification 71/78 without getting the classification list approved was not allowed. He pointed out that as per the provisions of Rule 173-B (2A), it was for the department to have allowed the appellant to avail the procedure under Rule 9-B for provisional assessment of the goods, but on the other hand, the Assistant Collector had directed him to pay duty, which he did under protest. He cited the decision of the Tribunal in 1985 (21) ELT 223 in the case of Indian Oil Corporation Ltd., Calcutta v. Collector of Customs, Calcutta. The ratio of the decision being that when provisional assessment becomes necessary in view of the contingencies set-forth, it was for the officer to direct the assessee to avail provisional assessment.
He also cited the Tribunal's decision in the case of I.D.P.L., Hyderabad v. Collector of Central Excise, Hyderabad reported in 1987 (27) ELT 356, where it had been held that "Provisional assessment - Vitamin Premix - Full duty being paid by assessee pending approval of revised classification list filed - Rule 173-B (2A) read with Rule 9-B of the Central Excise Rules, 1944 inapplicable". Thereby the learned advocate argued that if full duty is paid, provisional assessment need not be resorted to.
5. Contesting the arguments of the learned advocate, Shri K.D. Tayal, the learned SDR drew attention to the statutory provisions for payment of duty under protest. Rule 233 (B), which lays down the procedure for paying duty under protest that the appellant cannot frame a procedure himself and claim that he had paid duty under protest. He referred to Rule 173-B, sub-rule (3), which specifies the stage at which duty can be paid under protest viz. where the assessee disputes the rate of duty approved by the proper officer and that for purpose of removals pending approval of classification list by the proper officer, the provision under Rules 173-B and 173-CC are applicable. He submitted that in each of the situations, specific statutory provisions are provided and the appellants are required to abide by these provisions. He referred to the following case laws in support of his submissions:
1. 1987 (30) ELT 641 (SC) - Miles India Ltd. v. Assistant Collector of Customs.
"Refund claim - Limitation - Appellate Tribunal as well as Customs Authorities bound by statutory period of limitation - Appeal dismissed as withdrawn - Recourse to alternative remedy if available, advisable - Section 27 (1) of Customs Act, 1962".
2. 1988 (37) ELT 478 (SC) - Doaba Co-operative Sugar Mills - for applicability of time limit under Section 11-A and 11-B of the Central Excises & Salt Act, 1944.
On the issue of redetermination of the value by inclusion of the refund, the learned SDR said that the appellant had no case as it was fully covered by this Tribunal's decision in Order No. 101/89-B.l dated 28-7-1989 in the appellant's own case and the appeal has to be rejected.
6. The submissions made have been considered. The two issues required to be resolved are:-
1. Duty paid under protest, pending approval of classification list, whether such protest has to be taken as claim under Section 11-B of the Central Excises & Salt Act, 1944.
2. Whether refund obtained by the assessee becomes part of the assessable value.
With regard to the first issue, the appellants are following the Self Removal Procedure and as per the provisions of rules made thereunder, they have to follow the procedure of filing price list and classification list. Classification lists have been filed by them from time to time indicating the full description of the goods, value of clearances effected during the previous years and claiming exemption under the relevant notifications for the clearances which fall within the exempted limit. They have referred to letters written by them to the department that pending approval of the classification list, they will be paying duty under protest. This is in consequence to the direction by the department that the appellants are required to pay duty and not clear their goods under 'nil' rate of duty. On final approval of the classification lists on the refunds claimed by the appellant, the revenue has rejected them as hit by limitation under Section 11-B of the Central Excises & Salt Act and under such circumstances, when classification is pending approval, the right course for them is to have resorted to provisional assessment under Rule 173-B (2A). The provision under Rule 173-B (2A) reads as follows:-
"173-B (2A):
All clearances shall, subject to the provisions of Rule 173-CC, be made only after the approval of the list by the proper officer. If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the as-sessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under Rule 9-B for provisional assesssment of the goods".
In respect of dispute in rate of duty as per sub-rule (3) of Rule 173-B, the assessee can pay duty under protest. Therefore, pending approval of classification list, provisional assessment can be resorted to and in disputed rates of assessment, duty can be paid under protest. While this is the procedural requirement, the provision under Section 11-B for any claim for refund which fixes the time limit for claiming refund, proviso to that section stipulates that the time limit will not apply when duty has been paid under protest. Therefore irrespective of the circumstances under which duty is paid, when the assessee pays duty under protest, his claim cannot be stated to be hit by limitation, be it approval of classification list and any other. The citations quoted by the appellant's advocate are in their favour and the appeals on these issues are allowed with consequential effect subject to the eligibility of the exemptions under the various notifications based on the value of clearances from time to time. The Assistant Collector has to re-determine the value of clearances for the purpose of giving the consequential effect.
7. The next issue which is the subject matter in their appeal in E/1507/86-B.1 against the order-in-appeal No. 552-CE/KNP/85 dated 20-12-1985 for determining the assessable value by including the refund amount, the matter has already been decided in this Tribunal's Order No. 101/1989-B.l dated 28-7-1989. To quote the relevant portion:
"The issue that now remains to be seen is the redetermination of value by including refund amount. It is seen that earlier decisions are available as in the case of Karnataka High Court for the purpose of explaining the scope of Section 4(4) (d) (ii) and the Collector (Appeals) order on this aspect is also clear. As the amount of duty has already been collected from the customers, that duty is not to be excluded from the assessable value and the Assistant Collector's order is correct. From a reading of Section 4(4) (d) (ii), which reads as under:-
"does not include the amount of the duty of excise, sales-tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale".
This Section speaks of the exclusion of the duties paid, but in the case under reference, the duty paid has been recovered from the customers and, therefore, a refund that is given has to be reckoned for purpose of determining the value of the goods".
Extending this ratio, the appeal on this issue fails and is rejected.
8. In effect, therefore, the three appeals filed by the appellants in Appeals E/1506/86-B.1- (partly), E/1508/86-B.1 and E/1509/86-B.1 are allowed and their Appeal in E/1507/86-B.1 is rejected.