Customs, Excise and Gold Tribunal - Tamil Nadu
Andhra Cement Co. Ltd. vs Collector Of Central Excise on 1 November, 1985
Equivalent citations: 1986(7)ECR352(TRI.-CHENNAI), 1986(26)ELT553(TRI-CHENNAI)
ORDER C.T.A. Pillai, Member (T)
1. The appellants' claim for refund of Rs. 8,74,542.68 on gunny bags on clearances of coloured cement made from 28.12.81 to 17.2.82 was rejected by the Assistant Collector of Central Excise, Vijayawada Division by his Order No. 22/83 dated 5.8.83 holding amongst other things that duty had not been paid under protest. Even if it was paid under protest, the procedure laid down in Rule 233-B of the Central Excise Rules, 1944 had not been followed. He also noted that a purported claim contained in letter dated 16.4.82 from the appellant had not been received in his office; copy thereof which was submitted later would show that it was not in the prescribed form and not in accordance with the Trade Notice issued as long back as in 1972. In his order, he noted that the price list filed on 28.12.81 was approved on 30.12.81. The question of paying duty under protest would arise only after according of the approval of the price list. The letter of protest is said to have been sent on 29.11.82; hence it cannot be treated as a protest in terms of Rule 233-B of Central Excise Rules, 1944. Further, R.T.12 returns have not been endorsed with the protest as required under the rules. The regular claim for refund was treated as one contained in letter dated 29.11.82; hence, he found the claim be barred under Sec.11B of the Act and rejected the same.
2. When the matter was raised in appeal before the Collector of Central Excise (Appeals), Madras, that authority found that the appellant's claim for refund was on the ground that packing charges which was included in the assessable value was deductible and returnable to the buyer by the assessee. It is accepted by the appellant that they had erroneously included the cost of packing in the assessable value of the goods. In these circumstances, he held that the only course open to them was to lodge the refund claim and not pay duty under protest, when the price list submitted by them was approved without modification. He further noted that proviso to Rule 233B had not been fully followed; no acceptable evidence was forthcoming regarding the lodging of their claim under cover of their letter dated 16.4.82 the Certificate of Posting was not connectible. Accordingly, he rejected the appeal.
3. Before us the Advocate for the appellant pointed out that there was in fact a protest. There was a question as to the proper value to be adopted for purposes of assessment in respect of coloured cement. Pursuant to a direction given by the Department, value was taken as Rs.600/- inclusive of packing charge of Rs.100/-. This will be seen from the letter dated 29.12.81 itself. The Assistant Collector is not consistent when he states that the relevant price list was received on 29.12.81 and approved on 30.12.81 whereas letter No. PO/4966 a/55/81 dated 29.12.81 was received on the next day; by the time the letter was taken on file, the price list was already approved. A claim for refund arises in common law and is governed by the provisions of Sec.11B of the Act. In construing a corresponding provision relating to a claim by the Department on the party (less charge claim), it has been held by the Delhi High Court that Sec. 11A contains limited power of review vide 'Bawa Potteries v. Union of India' - 1981 ELT 114 (Delhi). This has been reiterated in the case of 'J.K. Synthetics v. Collector of Central Excise, Delhi' - 1981 ELT 328 (Del). The idea has been followed in various other cases such as 'M/s Nuchem Plastics v. Collector of Central Excise, Delhi' (1983 ECR 1888) and 'C.B. Glass Works v. Government of India' - 1983 ECR 1888D(Cegat) New Delhi. Rule 233B has been framed under Sec. 37 of the Central Excises and Salt Act, 1944. The scope of Rule making power under Sec. 37 is limited in that it is intended to "carry into' effect the purposes of this Act". The proviso to Sec.11B(1) states that the limitation of making a claim for refund within six months from the relevant date shall not apply wherein a duty has been paid under protest.
4. In the present case, a letter of protest was submitted on 28.12.81 itself. The gate passes were marked as 'duty paid under protest'. It is no doubt true that the R. T. 12 returns have not been so marked. This minor omission is a technical violation of provisions under the Rule and is one relating to procedure. He therefore, urged that it may be held that the provisions of Rule 233B have been complied with substantially. With reference to the Asst. Collector's stand that after the valuation list is approved, party should really claim refund rather than pay duty under protest, he referred to the provisions of Rule 173C(8) which specifically provides for duty being paid under protest even after the approval of price list by the proper officer. In this connection, he referred to provisions of Rule 173C(10) which provides for a filing of fresh list and even an amendment of the list filed or approved, as the case may be, if any alterations becomes necessary for any reason. If even amendment to a list is permissible, payment of duty under protest on a number of price lists should be an acceptable procedure to the Department.
5. The Senior Departmental Representative on the other hand pointed out that the price list had been approved, as filed without any amendment. There was, therefore, no scope for the issue of a speaking order. The letter dated 29.12.81 related to exclusion or otherwise of the value of gunny bags on the score as to whether they are returnable or not. This is hardly a relevant consideration in the approval of the price list. Assuming without conceding that there was a letter of protest, the full procedure under Rule 233 had not been followed in this case as the R.T. 12 returns were not suitably endorsed. He also reiterated the findings of the Collector (Appeals) that Certificate of Posting produced was not connectible to the alleged claim for refund dated 16.4.82.
6. We have considered the arguments of both sides. So far as the letter dated 16.4.82 is concerned, there is no acceptable evidence of its having been filed with the Asst. Collector of Central Excise, Vijayawada. The Certificate of Posting cited in support of the letter does not connect it to any particular letter. Hence, the claim for refund should survive or fall on the existence of a valid protest or not. It is an accepted position that the requirement of Rule 233B have not been fully complied with, though a letter dated 29.11.81 had been filed (we will advert to it in some detail a little later), containing a protest regarding payment of duty in respect of packing charges and gate passes have been endorsed and duty paid under protest, such an endorsement does not occur on the R.T. 12 returns. Sec 11B prescribes that if duty has been paid under protest, the time limit for filing of a claim for refund is not limited to a period of six months from the relevant date. The letter of protest saves a claim covered by the protest from the operation of the time bar. We have perused the letter dated 29.11.81 and are satisfied that there was indeed a letter of protest as one would understand it. The point that the letter was dated 29.12.81 taken on the file of the Asst. Collector on 30.12.81 and the relevant price list was approved on 30.12.81 itself does not make any difference to its being an acceptable letter of protest. Nothing prevents a party from filing a letter of protest alongwith filing of a price list at a higher value, particularly when it is noted from the letter of 29th December 1981 that the cost of the bags was included under instructions by the Asst. Collector himself. There is considerable force in the arguments of the Advocate for the appellant that in terms of Rule 173C(8), payment of duty under protest even after the approval of price list is a perfectly valid procedure. If the Asst. Collector noticed the letter of protest prior to his approval of the price list, he owed it to the appellant to have specifically referred to it in his order of approval and stated why he did not accept the protest but over-ruled it. If however, he sighted it but did not take it into account while approving the price list, then obviously, the letter would constitute a surviving protest in terms of Rule 173C(8). Thus, we find that in the present case, duty has indeed been paid under protest.
7. This leads us to the next question as to whether non-endorsement of R.T.12 returns with the words "duty paid under protest" and indicating the nature of protest by way of reference to the letter etc., is an infirmity which should bar the claim for refund for non-observance of the provisions of Rule 233B. As rightly pointed out by the Advocate for the appellant, Rule 233 is an enabling rule to enforce the main provisions of the Act including Sec. 1 1B. There was a formal letter of protest. Each gate pass was endorsed as 'duty having been paid under protest'. R.T.12 is merely a compilation of the individual clearances made during a month and along-with filing of the R.T.12, an assessee has also to file copies of the gate passes, extracts from the Personal Ledger Accounts, extracts from R.G.23 (if relevant) etc. It is nobody's case that the gate passes duly endorsed "duty paid under protest" had not been submitted along with R.T.12 returns. In fact, if they had not been done, the R.T.12 would have been returned for completion by the assessee. In these circumstances, we think that the provisions of Rule 233B have been specifically complied with as the Officer completing the R.T.12 returns is on notice that certain clearances have been made after payment of duty under protest, as will be evident from a perusal of the gate passes. The Officer completing the R.T.12 returns has to refer to these gate passes, amongst other things, to verify the correctness of the entries in the R.T.12 itself. We would therefore, conclude that the provisions of Rule 233B in regard to endorsement of gate passes and R.T.12 returns are directory and not mandatory in nature. This is particularly so as an important document, such as gate pass has been duly endorsed, this action itself being a follow up of a valid letter of protest dated 29.12.81.
8. In these circumstances, we find that duty had been paid under protest in this case. Accordingly, we set aside the orders of the Collector (Appeals), Madras and the Asst. Collector and remand the case back to the Asst. Collector for determination of the claim of the party on merits, keeping in view our observations herein.