1985 (5) TMI 57 - HC - Central Excise

Summary

Issues Involved:
1. Whether the letters dated 2-2-1973 and 14-3-1973 can be construed as a protest under Section 11B of the Central Excise and Salt Act, 1944.
2. Whether the protest, if any, related to the question of valuation only or could cover the rate of duty as well.

Detailed Analysis:

1. Whether the letters dated 2-2-1973 and 14-3-1973 can be construed as a protest under Section 11B of the Central Excise and Salt Act, 1944:

The case revolves around the interpretation of two letters sent by the respondent to the Superintendent of Central Excise, dated 2-2-1973 and 14-3-1973. The respondent claimed that these letters constituted a protest against the payment of excise duty, thus entitling them to a refund under Section 11B of the Act. The first letter stated, "we are paying the duty under protest, reserving our rights to go on appeal," while the second letter reiterated the protest and mentioned, "reserving our rights or claim for the excess amount of duty paid by us in any manner."

The Court examined the context in which these letters were written. It was found that the respondent became aware of the mistake in duty classification only after a Bombay High Court judgment in 1977. Therefore, the letters written in 1973 could not have been in protest of the classification, as the respondent was not aware of any mistake at that time. The Court concluded that the protest mentioned in the letters was related to the inclusion of freight charges in the sale price, not the classification of the goods.

2. Whether the protest, if any, related to the question of valuation only or could cover the rate of duty as well:

The Court analyzed whether the protest in the letters extended to the rate of duty or was confined to the valuation issue. The price list submitted by the respondent in 1973 included a note stating, "The above prices are inclusive of freight charges," indicating that the dispute was about the inclusion of freight charges in the assessable value. The Appellate Collector's order from 1973 also showed that the dispute was about freight or handling charges, not the classification.

The Tribunal had earlier concluded that the second letter dated 14-3-1973 was comprehensive enough to include a protest regarding classification. However, the Court found this interpretation erroneous, as there was no discussion by the Tribunal on how it reached this conclusion. The Court emphasized that the respondent could not have protested the classification in 1973, as they were not aware of any mistake until the 1977 Bombay High Court judgment.

The Court noted that the respondent did not continue to make such protests in subsequent years (1974, 1975, and 1976), further indicating that the protest was related only to the inclusion of freight charges. The Court concluded that a protest regarding the inclusion of freight charges could not be equated to a protest regarding classification.

Conclusion:

The Court answered the first question in the negative, stating that the letters dated 2-2-1973 and 14-3-1973 did not constitute a protest under Section 11B of the Act. The second question was answered by stating that the protest related to the question of valuation and not the rate of duty or classification. The Tribunal was directed to finally dispose of the appeal in light of this judgment.