Customs, Excise and Gold Tribunal - Mumbai
Bombay Dyeing And Mfg. Co. Ltd. vs Collector Of Central Excise on 4 October, 1991
Equivalent citations: 1992(38)ECR191(TRI.-MUMBAI)
ORDER P.K. Desai, Member (J)
1. This appeal is directed against the order in appeal No. ADN-831/90 dated 13.9.1990 confirming the order in original No. G/II/12/90 dated 31.1.1990, rejecting the appellant's claim for refund of Rs. 31,890.60.
2. The appellants filed refund claim for the said amount which was received in the office of Asstt. Collector on 16.3.1989. The claim was based on the plea that by virtue of order in appeal dt. 11.2.1988 the matter was read judicated upon by the Addl. Collector on 1.2.1989, dropping the demand and the amount that was paid pursuant to the initial order in original had become liable to be refunded. As the amount of duty for which the refund was claimed, was paid on 24.9.1986, it was felt that the demand was barred by the period of limitation provided under Section 11B of CESA and that the same was not paid under protest in due compliance with the provisions of Rule 233B of the Central Excise Rules and as such, not payable and therefore a show cause notice dated 14.12.1989 was issued on the appellants who came forward with the plea that the refund arose out of the order and as such the same ought to have been suo motu sanctioned without any application and that in any case, the period of limitation prescribed under Section 11B did not apply. The AC however did not consider the said contention and rejected the claim as time barred, In the appeal before the Collector (Appeals), the same contention was re-agitated but in his opinion, the claim for refund arose as the result of order in original passed by the Addl. Collector and as such Clause 3 was not attracted and that the protest lodged was not in confirmity with the provisions of Rule 233B of the Rules, He therefore rejected the appeal.
3. Shri Willingdon Christian, the Id. Advocate for the appellants submitted that the duty amount was paid on 24.9.1986 pursuant to the order of the AC dt. 21.8.1986 and that the said amount was paid under protest and referred to the challan in that regard where the specific mention was made about payment under protest. He submitted that the said order of the AC was however taken up in appeal and the Collector (Appeals) vide his order dt. 11.2.1988 set aside the said order holding that the Addl. Collector was riot authorised to adjudicate upon as vide Section 8 of the Amending Act, it was the Collector who could adjudicate upon and directed the papers to be placed before the appropriate authority. The matter was thereafter adjudicated upon by the Addl. Collector who vide his order dt. 1.2.1989 dropped the demand. In his submission, the refund claim had arisen out of the said adjudication proceedings and as such Sub-section 3 stood attracted and in any case the duty having been paid under protest vide proviso, to Sub-section 1, the period of six months would not stand attracted. He further pleaded that Rule 233 had no application here and even otherwise a substantial compliance thereof had to be taken as made. He submitted that point very similar to the one here was decided by the South Regional Bench in the case of Mahavir Metal Industries v. Collector of Central Excise reported in 1987 (31) ELT 739 : 1984 ECR 1409 (Cegat) where the department was directed to pay the refund.
4. Smt. Lipika Majumdar Roy Choudhury, the ld. SDR supported the order and submitted that Sub-section 3 of Section 11B would not stand attracted as the said section contemplated the refund arising out of the order passed in appeal or revision whereas here the refund had become payable under the order in original and for that the only saving clause was payment under protest but by non-compliance of Rule 233B, the saving clause was not applicable and that the appellant ought to have preferred a claim for refund within the period of six months stipulated under Section 11B.
5. There is no dispute over the factual position that the duty amount was paid pursuant to the order of the AC dt. 21.8.1986. It is apparent from the record that at the time of payment, the appellants lodged the protest and that it was only on the adjudication by the Addl. Collector dt. 1.2.1989 that they became eligible for refund of the said amount as their notice for demand was dropped. The proceedings before the Addl. Collector arose out of the order passed by the Collector (Appeals) remanding the matter back to the adjudicating authority with a direction to comply with the requirement of Section 8 of the 'Amending Act'.
6. Taking the first ground about duty having been paid under protest, the challans under which the amounts had been paid bear the endorsement of payment "under protest". Payment was made in pursuance of the order in original of the AC. It is an undisputed position that the said order was taken in appeal before the Collector (Appeals). Rule 233B of the Central Excise Rules provide for the procedure laid down for raising the protest and the essence behind the same is that the party paying should not raise a protest just for the sake of raising but should have some ground to agitate upon and that some proceedings in relation thereto are being initiated. It has been practically a settled position that the provisions of Rule 233B are procedural in nature and substantial compliance thereof is called for. Here the appellant having lodged the protest had already filed an appeal against the order under which they were made to pay the amount. It therefore cannot be said that procedure laid down under Rule 233B was not substantially complied with. Thus even on this count, the appellant would become eligible to get the refund.
7. The main issue however is whether in the facts and circumstances as indicated above and which have not been challenged at all, the provisions of Sub-section 3 of Section 11B could stand attracted. The order passed by the Addl. Collector was an order of the adjudicating authority and that the adjudicating authority adjudicated upon the issue as a result of the order passed in appeal by the appellate authority. Such an order has to be held as falling within the purview of Sub-section 3 and in this regard, one can with approval, refer to the decision given by the South Regional Bench in Mahavir Metal Industries (supra). In the said matter, the Hon'ble Member has exhaustively dealt with the provisions of Sub-section 3 and there appears practically no scope for taking a view different from the one taken. The submission made by the Id. SDR here also appears to have been squarely answered by the said authority. Notwithstanding the said decision of the Tribunal even examining the scope of Sub-section 3, one can hardly visualise the situation where the order passed during the adjudication is taken out of the purview of Sub-section 3.
8. Taking these factors into consideration, the order passed by the authorities below rejecting the claim for refund cannot be sustained and has to be rejected. The appellants are eligible to get the refund of the duty paid in pursuance to the show cause notice as adjudicated by the AC but which on remand of the matter by the Collector (Appeals) the Addl. Collector has dropped the same. The appeal under the circumstances is allowed. The respondents are directed to pay the refund as claimed if otherwise in order.