Payment Under Protest by PLA Entry Can Defeat Limitation Bar on Central Excise Refund

Duty paid at the Department's instance by debit entry in the PLA, where the entry and RT-12 return expressly recorded payment under protest, could be treated as payment under protest. Strict compliance with Rule 233B of the Central Excise Rules, 1944 was therefore unnecessary on these facts. As the protest was sufficiently evidenced by the surrounding records, the refund claim could not be rejected as time-barred, and refund was held payable in favour of the assessee.

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Issues: Whether the refund claim was barred by limitation, and whether the duty paid through PLA at the instance of the Department with a protest endorsement could be treated as payment under protest without strict compliance with Rule 233B of the Central Excise Rules, 1944.

Analysis: The duty was not paid on the gate passes but by debit entry in the PLA at the instance of the Department, and the entry itself recorded that the payment was made under protest. The protest was also reflected in the RT-12 return. In these circumstances, strict application of Rule 233B of the Central Excise Rules, 1944 was held to be unnecessary, because the surrounding facts sufficiently established that the payment was made under protest. Once the payment was treated as under protest, the refund claim could not be rejected on the ground of time-bar.

Conclusion: The refund was held to be payable without applying the limitation bar, and the issue was decided in favour of the assessee.

Ratio Decidendi: Where duty is paid at the Department's instance by debit entry in PLA and the payment is expressly marked as under protest, the payment may be treated as under protest and refund cannot be denied on limitation merely for non-strict compliance with Rule 233B of the Central Excise Rules, 1944.

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