Customs, Excise and Gold Tribunal - Tamil Nadu
Shellya Plastics Industries Pvt. Ltd. vs Collector Of C. Ex. on 13 March, 1991
Equivalent citations: 1991ECR372(TRI.-CHENNAI), 1991(56)ELT169(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Madras dated 30-11-1987 confirming the order of the Asst. Collector of Central Excise, Yeshwantpur Division dated 8-5-1987 and rejecting the appellant's claim for refund on grounds of limitation under Rule 11 of the Central Excise Rules, 1944 read with Section 11B of the Central Excises and Salt Act, 1944. The appellant was manufacturing HOPE woven sacks and sought classification of the goods under Tariff Item 15A(2) as 'Articles of Plastics' and the Department classified the goods under Tariff Item 68 and an order to that effect was passed by the Asst. Collector on 11-3-1987 which was confirmed in appeal by an order passed by the Collector of Central Excise (Appeals) dated 12-8-1987. The appellant thereafter agitated the matter by way of Revision before the Government of India and the proceedings, by operation of law, got transferred to the Tribunal after formation of the Tribunal and the matter was ultimately disposed of by the Special Bench of the Tribunal in appeal No. 132/78-C (Order No. 194/83-C) dated 11-7-1983 holding that the goods are classifiable as only 'Articles of plastics' under Item 15A(2) of the C.E. Tariff. During the pendency of the appeal before the appellate authority on a question of classification, the appellant filed a letter of protest before the Department on 5-5-1978 addressed to the Supdt. of Central Excise, Bangalore which was acknowledged by the Supdt. and replied to on 6-5-1978. In the present case the appellant is restricting his claim of refund of duty for the period 5-5-1978 to 19-3-1979 and is questioning the correctness of the findings of the authorities below in rejecting the appellant's claim on ground of limitation.
2. Shri Venkataraman, Ld. Counsel for the appellant contended that during the pendency of the classification issue before an appellate authority when the Department insisted on the appellant for paying the duty, the appellant lodged a letter of protest on 5-5-1978 to the Supdt. of C. Ex., Bangalore and the same was acknowledged and replied to by the Supdt. on 6-5-1978. At the relevant time Rule 11 was in force and the same did not prescribe any particular form for lodging protest for paying duty. The Ld. Counsel further submitted that continuously for the period in question protest endorsement has been made in R.T. 12 returns and this fact is not disputed by the Department. It was, therefore, submitted that during the pendency of the classification issue in appeal when the Department insisted on payment, the only course open to the appellant was to lodge a protest letter which the appellant did by their letter dated 5-5-1978 duly acknowledged by the Department and followed up the same by protest endorsement in all the R.T.12 returns. Rule 11 being the relevant rule in force at the relevant time and the same having not prescribed any particular form for protest the protest letter filed by the appellant should be treated as valid and the appellant should be held to be entitled to the refund. The Ld. counsel also referred to the ruling in the case of India Cements v. Collr. of C. Ex. 1989 (41) ELT 358 (SC).
3. Shri Vedantham, Ld. D.R. submitted that though there was a letter of protest on 5-5-1978 since the appellant had for the earlier period made protest endorsement in the gate pass and since such protest was not made in the gate pass during the relevant period, the protest cannot be held valid. The Ld. D.R. in other respects adopted the reasoning of the authorities below.
4. We have carefully considered the submissions made before us. The period involved for consideration of the claim of refund of the appellant is 1-4-1978 to 19-3-1979 and the appellant has chosen to restrict the claim from 5-5-1978 to 19-3-79. The short question that arises for our consideration in the present appeal is whether for the period in question the letter of the appellant dated 5-5-1978 could be construed to be a protest within the meaning of Rule 11 as it stood at the relevant time so as to take the case of the appellant out of the bar of limitation under the Rules. It is not disputed that the appellant made protest endorsement on the R.T. 12 returns after paying the duty for the period in question. We have gone through the letter dated 5-5-1978 and it reads as under: -
"As insisted by you, we have paid a sum of Rs. 10,000 (Rs. ten thousand only) to Canara Bank, Vyalikaval, Bangalore towards payment of basic excise duty on HOPE woven sacks and are enclosing the chalan for the same.
We will be paying the duty under protest as this item is under dispute as regards its classification. However, in the meantime we may please be allotted a personal ledger a/c. to facilitate payment of the said duty."
This letter has been acknowledged by the Supdt. of C. Ex. and responded to on 6-5-1978 and the Supdt. in the said letter has directed the appellant to pay duty classifying the goods under Tariff Item 68. When the appellant has challenged the order of the Asst. Collector in appeal on the question of classification, during the pendency of the appeal in order to protect his rights, it is open to the parties to pay the duty under protest, more particularly when the Department insists on payment of the duty in terms of classification of the goods under T.I. 68. In the present case, the classification question has been finally decided in favour of the appellant and, therefore, the order would date back to the original date on which the appellant joined the issue with the Department contending that the goods are re-classifiable under Item 15A(2) as 'articles of plastics'. It is only in this background and context the protest letter of the appellant dated 5-5-1978 extracted above has to be construed vis-a-vis Rule 11 and also in the light of the endorsement made in the R.T. 12 returns. Since no particular form at the relevant time was prescribed for making the protest as is now found in Rule 233B which became operative from 11-5-1989 and since the appellant has been insisted by the Department to pay the duty classifying the goods under T.I. 68, the protest of the appellant dated 5-5-1978 has to be taken as valid, more particularly in the context of the fact that the classification issue itself was alive and being agitated by the appellant in the proper forum in accordance with law. Added to this we have also taken into consideration the protest endorsement made in the R.T. 12 returns for the period in question. Therefore, on consideration on the factual evidence on record we hold that there was a valid protest on the part of the appellant for the period 5-5-1978 to 19-3-1979. The ratio of the ruling of the Supreme Court in the case of 'India Cements' cited supra has also highlighted the fact that if no form is prescribed for payment of duty under protest and if the party does not accept this liability to pay duty and express the same in the form of a protest letter, the same would be valid. We hold that the ratio of the decision would be applicable to the facts and circumstances of this case. On consideration of the entire materials on record we hold that the views taken by the authorities in the impugned order are not correct. In the result the impugned order is set aside and the appeal is allowed and we hold that the appellant would be entitled to the claim for the period 5-5-1978 to 19-3-1979. Ordered accordingly.
V.P. Gulati, Member (T)
5. I observe that the lis in the matter started with the proceedings drawn by the Assistant Collector demanding duty from the appellants in respect of the goods in question under Tariff Item 68 and by the order dated 11-3-1977 the Learned Asst. Collector confirmed the demand for the period of six months. The appellants took up the matter in appeal and pleaded for assessment of the goods under Tariff Item 15A(2) and their appeal was rejected by the order of the Learned Appellate Collector dated 12-8-1977. The appellants thereafter took up the matter in Revision. This Revision came to be transferred to CEGAT after it was constituted and the CEGAT ruled in favour of the appellants. The appellants, it is seen, only on 5-5-1978 paid the duty as per the order of the Learned Appellate Collector and they have not filed any refund claim or produced any evidence in respect of the same. They, however, on 5-5-1978 on a demand for a particular period made by the Superintendent of Central Excise submitted a letter. In this letter while they agreed to pay the said amount they have pleaded that inasmuch as duty payment and the classification issue is under dispute they will pay the duty under protest. The point that arises in this context is whether once the issue stood concluded by an order of the Appellate Collector, the duty could be deemed to be paid under protest.
In this context it is pointed out that at the material time there was no relevant Rule under which duty could be paid under protest but there was a mention in Rule 11 under which for the purpose of reckoning the limitation a mention has been made that in case duty has been paid under protest, the limitation would not apply. It is agreed by both the sides that by virtue of this provision both the licensee and the Department have been earlier taking the filing of the protest letter as an adequate requirement for payment of duty under protest. There was no procedure as such prescribing for payment of duty under protest. It was pointed out to the Ld. D.R. for the Department that in the absence of any specific instructions in the law or in the Rules in regard to payment of duty under protest, whether once the matter stood concluded by virtue of an order of the Appellate Collector or an adjudication order whether the duty could be continued to be paid under protest, he pleaded that there is no case law to cite nor he had any plea to make in this regard. The Ld. Advocate for the appellants, however, pleaded that the duty could be continued to be paid under protest notwithstanding an adverse order in adjudication or in appeal by the competent departmental authorities that this position stood clarified by the Central Excise Rule 233B introduced later in this regard. He pleaded that Rule 233B should be taken to be only confirming the practice which was there prior to its introduction under the Central Excise Rules. The point that arises for consideration, therefore, is whether where an order has reached a stage of finality in a given case and has been taken up in appeal by way of an appeal or revision the duty could still be paid under protest. It is observed in this context that as a matter of policy of fairplay the authorities under law have recognised that if a person is aggrieved he should be allowed to pay duty under protest and have now made a statutory provision under Rule 233B of the Central Excise Rules in this regard so that protest would keep the rights of the assessees alive till the matter is finally decided. In that view of the matter we hold that the appellants have a case and that notwithstanding an adverse order against them by the appellate authority the payment of duty under protest would continue to be available to them, as by virtue of that the appellants could keep their rights alive. Once the facility for payment of duty under protest is recognised it shall be open for the aggrieved party to agitate after the proceedings are concluded. The Judgment of the Hon'ble Supreme Court in the case of India Cements Ltd. v. Collector of C. Ex. -1989 (41) ELT SC (358) - would fairly cover the point at issue. Once it is accepted that the appellants have filed a valid protest letter and their intention to payment of duty under protest is manifest in that letter it has to be taken that the payments made thereafter are all under protest. In the present case there is no dispute that payment of duty was made under protest and the wording of the protest letter were such that these lead to the inference that the future payments were intended to be made under protest. At the relevant time there was no procedure as such like under Rule 233B and no set procedure was prescribed for making payment of duty under protest and the Ld. D.R. also does not have instructions of the authorities by which the assessees were required to follow any specific procedure. In the absence of such prescribed procedure, the letter of the appellants dated 5-5-1978 has to be taken and treated as adequate enough for the purpose of registering their intention to pay duty under protest and even if the gate passes were not endorsed or even the R.T. 12s were not endorsed the appellants cause could not be held to suffer because of this, as there was no prescribed requirement for endorsing the R.T. 12 or gate passes to the effect that duty was paid under protest. The Ld. Appellate Collector in his order has merely held that the letter of protest is irrelevant. He has not gone into the grounds on which the lower authority rejected the appellant's claim. In fact in the context of filing the letter of protest the Department has not filed any application for review on this aspect and to that extent once the lower authorities have accepted the letter of protest, the Collector could not have held it otherwise against the appellants on the question of the status of the letter of protest. In view of the above while concurring with Ld. Brother, I hold that the lower authority's order is bad in law and the appellant's appeal has to be allowed. Ordered accordingly.