1991 (9) TMI 91 - HC - Central Excise

Summary

Issues:
1. Whether duty-paid poster paper converted into wax coating paper attracts excise duty.
2. Refund applications filed by petitioners for duty paid under mistake of law.
3. Limitation period for filing refund applications under Section 11B(1) of the Act.
4. Consideration of refund applications based on protest against duty payment.

Analysis:

1. The petitioners were involved in converting duty-paid poster paper into wax coating paper. They contended that this process did not amount to manufacturing and thus, no excise duty should be levied. Citing the case of Kwality Coated Products v. Government of India, it was established that coating duty-paid paper with wax did not attract excise duty. Consequently, a government notification was deemed illegal and quashed.

2. The petitioners filed refund applications for duties paid under the mistaken belief that excise duty was applicable. The applications detailed the periods and amounts for which refunds were sought, along with references. The petitioners also indicated in a letter that payments for waxed paper should be treated as made under protest.

3. The issue of limitation under Section 11B(1) of the Act arose concerning the refund applications. The law stipulated a six-month period for claiming refunds, except where duty was paid under protest. The petitioners argued that their letter dated 23-2-1981, indicating payments made under protest, should extend the limitation period. However, the respondents contended that a formal protest at the time of payment was necessary.

4. The court differentiated between the two refund applications based on the protest against duty payment. For the application dated 5-3-1982, where a protest was made in the letter dated 23-2-1981, the court found the claim justified and directed the respondent to consider the refund application within a specified timeframe. In contrast, for the application dated 26-5-1981, where payments were voluntary without protest, the court dismissed the petition due to the limitation period under Section 11B(1).

In conclusion, the court allowed the writ petition for one refund application based on the protest against duty payment, while dismissing the petition for the other application due to exceeding the limitation period without protest.