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2015 (12) TMI 233 - ALLAHABAD HIGH COURT

2015 (12) TMI 233 - ALLAHABAD HIGH COURT - 2016 (331) E.L.T. 386 (All.) - Denial of refund claim - Duty paid under protest - Concessional rate of duty - Bar of limitation - Held that:- First appellate authority has given a categorical finding that the duty was paid under protest. We also affirm this finding upon a perusal of the letter dated 21.01.1998 which has been considered by the first appellate authority as well as the letter dated 10.02.1998 and the challan dated 04.02.1998 through which .....

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ths would not apply to a claim of refund. Consequently, the finding of all the authorities that the application of the appellant was barred by limitation, is patently erroneous. - judgment of the Tribunal was delivered on 22.01.1999. The application was filed on 31.08.1999 within a period of seven months which, in our opinion, is a reasonable period. The application for refund does not become barred by time.

Tribunal committed a manifest error in non-suiting the appellant's claim on t .....

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ellant was denied the requisite forms/ certificate and deposited the duty under protest, he was entitled to claim a refund. - Impugned order is set aside - Decided in favour of assessee. - Central Excise Appeal Defective No. - 142 of 2010 - Dated:- 19-11-2015 - Hon'ble Tarun Agarwala And Hon'ble Vinod Kumar Misra, JJ. For the Appellant : Arvind Saran Das,Bharat Ji Agrawal,P.Agrawal,Shubham Agrawal For the Respondent : Sr. S. C.,R.C. Shukla,Syed Zafar Monnis ORDER We have heard Sri Bharat .....

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sed for manufacture of fertilizer. The appellant was receiving raw Naphtha at a concessional rate of duty. For the period 08.02.1998 to 11.05.1998, the jurisdictional excise authority did not allow the appellant to purchase raw Naphtha at concessional rate of duty and refused to issue a certificate in Form CT-2. The appellant protested vide letters dated 21.01.1998 and 10.02.1998 and deposited the excise duty vide challan dated 4th February, 1998 indicating that they were depositing the duty und .....

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ovisio to Section 11-B of the Central Excise Act, 1944 (hereinafter referred to as 'the Act') seeking refund of ₹ 1,22,09,768.74. The authority rejected the claim of the appellant on the ground, that the duty was not paid under protest and that the claim application was preferred after the prescribed period of six months as envisaged under Section 11-B of the Act and, therefore, the claim was barred by time. The appellant, thereafter, preferred an appeal which was also rejected by .....

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period of six months and, therefore, the claim was barred by time. The appellant, being aggrieved, thereafter, preferred a second appeal before the Tribunal which was rejected on the ground of limitation. The Tribunal, however, came up with a new ground contending that since the appellant was a buyer, he was not entitled to apply for refund under Section 11-B of the Act. The appellant, being aggrieved, has filed the present appeal which was admitted on the following substantial questions of law: .....

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w of the second provision to Section 11B the limitation of six months shall not be applicable in respect of the duty deposited by the appellant.? (2) Whether the Hon'ble CESTAT has erred in deciding the appeal on the ground that the appellant being buyer of excisable goods was not entitled to make deposit under protest, when the Commissioner (Appeals) has held that the appellant had paid the duty under protest as required under the law and the respondent has not appealed or filed across obje .....

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in the appellant's case, when it had paid the duty under protest on purchase of raw Naphtha procured by it?" In this background, we have heard the learned counsel for the parties. Section 11-B of the Act provides, that any person claiming refund of excise duty and interest is required to make an application for refund within six months. The second proviso states that the limitation of six months would not apply where any duty and interest, if any, was paid under protest. The first appel .....

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rtment in any further appeal and, therefore, this finding is binding upon them. We are also of the opinion that when the appellant filed an appeal against the duty levied, it means that the deposit was made under protest. A constitutional Bench of the Supreme Court in Mafatlal Industries Limited vs. Union of India, (1997) Vol. 89 E.L.T. Page 247, held : "83. It is then pointed out by the learned Counsel for the petitioners-appellant that if the above interpretation is placed upon amended Se .....

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pecific situations whereas the one applicable in most cases is the date of payment. It is submitted that the appellat/ revision proceedings, or for that matter proceedings in High Court/ Supreme Court, take a number of years and by the time the claimant succeeds and asks for refund, his claim will be barred; it will be thrown out on the ground that it has not been filed within six months from the date of payment of duty. We think that the entire edifice of this argument is erected upon an incomp .....

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y, its rate, classification or any other aspect. If one reads the second proviso to sub-section (1) of Section 11B along with the definition of "relevant date", there is no room for any apprehension of the kind expressed by the learned Counsel. 84. It was then submitted that Rule 233B which presecribes the procedure to be followed in cases where duty is paid under protest requires the assessee to state the grounds for payment of duty under protest and that it may well happen that the a .....

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rotest. (2) On receipt of the said letter, the proper officer shall give an acknowledgement to it. (3) The acknowledgement so given shall, subject to the provisions of the sub-rule (4), be the proof that the assessee has paid the duty under protest from the day on which the letter of protest was delivered to the proper officer." 85. The rule no doubt requires the assessee to mention the "grounds for payment of the duty under protest" but it does not empower the proper officer, to .....

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d only with a view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not. 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. The period of limitation of six months will then have no application to him. 86. We may clarify at this stage that when the duty is paid under the orders of Court (wheth .....

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mely, that the period of limitation of six months would not apply to a claim of refund. Consequently, the finding of all the authorities that the application of the appellant was barred by limitation, is patently erroneous. The period of six months as envisaged under Section 11-B (1) of the Act, is applicable when duty has not been paid under protest and an application for refund has been filed within six months, but where a duty has been paid under protest, then the period of limitation does no .....

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