Refund of duty paid under departmental insistence was allowed despite Rule 233B non-compliance and delayed return of inputs.

Duty reversed at the insistence of excise officers after inputs were returned beyond the stipulated period was treated as a deposit made under protest and remained refundable. The delayed return of inputs was viewed as a condonable irregularity, particularly in light of the amended extended period. Formal non-compliance with Rule 233B of the Central Excise Rules, 1944 was not treated as defeating the refund claim where the payment arose from departmental action and investigation-driven insistence. The refund was held admissible, the appellate order was upheld, and the Revenue's challenge failed.

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Issues: Whether the duty amount reversed on the insistence of Central Excise officers, after the inputs were cleared for processing and received back beyond the stipulated period, could be treated as a deposit under protest and refunded despite non-compliance with Rule 233B of the Central Excise Rules, 1944.

Analysis: The assessee had reversed the amount pursuant to the directions of the preventive officers, and the refund was claimed after the goods were subsequently received back. The delay in return of inputs was treated as a condonable irregularity, especially in view of the extended period under the amended rule. The deposit was made in the course of departmental action and under officer insistence, and such payments are to be regarded as having been made under protest. A formal observance of Rule 233B was not treated as defeating the claim in these circumstances, consistent with the principle that deposits made during investigation are not to be narrowly construed as voluntary payments.

Conclusion: The refund was held admissible, the Commissioner (Appeals) order was upheld, and the Revenue appeal failed.

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