Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of C. Ex., Nagpur vs Abhideep Chemicals Pvt. Ltd. on 21 February, 2002
Equivalent citations: 2002(143)ELT70(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Notice issued to Abhideep Chemicals P. Ltd., the respondent to this appeal, proposing recovery of Modvat credit taken by it on the ground that it had not followed the proper procedure and appropriate duty had not been paid on the inputs in question. The Dy. Commissioner confirmed the proposal in the notice. The manufacturer thereupon paid duty in question and appealed to the Commissioner (Appeals). The Commissioner (Appeals) allowed the appeal and set aside the impugned order before him and remanded the matter to the adjudicating authority for adjudication afresh. On such adjudication, the Joint Commissioner dropped the proceedings in the demand. In the meantime, the manufacturer had claimed refund of the amount that it had deposited. The Asstt. Commissioner rejected the claim on the ground that it was barred by limitation. He did not accept the contention of the manufacturer that the duty having been paid under protest was safe from limitation. He said later protesting the payment of duty was filed on 1-4-98, after the duty was paid on 31-3-98. The protest would be valid only prior to payment of duty being protested.
2. The manufacturer appealed this order. The Commissioner (Appeals) reproduced Paragraphs 83 to 86 of the judgment in Mafatlal Industries Ltd. v. UOI -1997 (89) E.L.T. 247 and concluded that there is no necessity to find protest when an appeal has been filed against the order filed by the lower authority. He also found that no notice has been issued to the manufacturer before rejecting his refund claim on the ground of limitation. He therefore remanded the case to adjudicating authority for de novo adjudication.
3. The department has come up in appeal against that part of the order holding that claim was not barred by limitation, because duty was paid under protest. The respondent is absent and unrepresented despite notice.
4. What was listed today was a stay application. However with the consent of the Departmental Representative, the appeal itself is taken up for disposal.
5. The grounds in the departmental appeal is that Paragraph 85 of the Supreme Court judgment requires that "any person paying the duty under protest has to follow the procedure prescribed by the rule and once he does so, it shall be taken that he has paid the duty under protest." Paragraph 86 of the judgment "clarify that when duty is paid under orders of Court pending an appeal/reference/writ petition, it will certainly be payment under protest; in such a case, it would not be necessary to lodge the protest as provided by Rule 233B."
6. Therefore, The appeal proceeds, except in cases where duty is paid by orders of a Court, every protested payment would require a written protest specified under Rule 233B. This ground was explained by the Departmental Representative.
7. This argument it appears to me, ignores Paragraph 83 of the Supreme Court judgment. The Court in that paragraph was addressing itself to the argument of the Counsel for the petition relating to interpretation of amended Section 11B that any claim for refund including one arising as a result of an appellate or other order or a superior Court or authority would have to be regulated by Section 11B. The provision of Section 11B of the Act would not be available in a case where the refund has arisen as a consequence of a decision of an appeal or a revision proceedings in a Court. It would take many years for the decision to proceed. Any claim thereafter would be dismissed as barred by limitation. The Court rejected this argument. It said that the second proviso to Section 11B as amended in 1991 expressly provides that the limitation of six months shall not apply where any duty has been paid under protest. It said "Now, where a person proposed to contest his liability by way of appeal, revision or in the higher Courts, he would naturally pay tine duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay duty without protest even when he contests the levy of duty, its rate, classification or any other aspect." The Court's conclusion in Paragraph 85 was in reply to an objection raised by Counsel in Paragraph 84 of that order by authority to him. A letter of protest is submitted as request to record it if he is not satisfied with the ground of protest. The Court refused to accept this argument. Thereafter it recorded the sentence. It said that any person paying the duty under protest has to follow the procedure prescribed by the Rule and once he does so, it shall be taken that he has paid the duty under protest. It clarified in Paragraph 86 that any duty paid under orders of a Court will be a payment under protest.
8. In my view, therefore the Court has taken into account three specific circumstances in which payment of duty is held to be made under protest. The first is referred to in Paragraph 83 when the assessee pays the duty, but protests the payment of duty by filing an appeal. The relevant provision of the law required that before the Appellate authorities provided in the statute either the Commissioner (Appeals) or the Tribunal can hear the appeal, deposit of duty has to be made. Therefore every person intending to appeal any liability to pay duty either depositing the duty in question or seek its waiver. If any waiver is granted request of refund will not arise. Any duty that the manufacturer pays in that situation or either he files an appeal or either when the appeal is pending would be the duty paid under protest, the protest being by way of appeal, revision etc. In Paragraph 85 the Court was concerned with the form of protest which would require to be tendered when an appellant is not proceeding an appeal or revision or even in such a case if the person concerned formally records a protest. Paragraph 86 contained the clarification of the Court relating to orders made under a Court. The case of the respondent is covered by Paragraph 83. It had paid the duty before filing an appeal to the Commissioner (Appeals) and that duty was paid under protest, as held by the Supreme Court. I therefore do not find any merit in the department's appeal in this regard.