Refund claim linked to an unchallenged appellate order cannot be rejected on protest-payment procedure; natural justice requires a hearing.

A refund claim arising from an unchallenged appellate order could not be rejected by mechanically applying the procedural requirements for duty paid under protest, where the entitlement to refund followed from that appellate determination. Rule 233B of the Central Excise Rules, 1944 was found inapplicable on those facts. The original authority also rejected the claim without granting a hearing, which violated natural justice. The impugned order was therefore set aside and the matter remanded for fresh decision after hearing the parties.

---

---

Issues: Whether the rejection of the refund claim was sustainable, and whether the matter required reconsideration after compliance with the procedure for duty paid under protest and observance of natural justice.

Analysis: The refund claim arose as a consequence of the appellate order allowing the appellant's claim to deduction of cash discount at the higher rate. The earlier appellate order had not been challenged by the Revenue, and the appellant's entitlement to refund followed from that order. The invocation of Rule 233B of the Central Excise Rules, 1944, was found inappropriate in the facts, since the refund was being pursued on the basis of the appellate determination. It was also noticed that the original authority rejected the refund claim without granting a hearing, thereby violating the principles of natural justice.

Conclusion: The rejection of the refund claim could not be sustained. The impugned order was set aside and the matter was remanded to the original authority for fresh decision after hearing the parties.

Ratio Decidendi: A refund claim consequential to an unchallenged appellate order cannot be rejected by mechanically invoking procedural requirements for protest payment, and rejection without affording a hearing violates natural justice.

---