2008 (12) TMI 579 - AT - Central Excise

Tribunal rules duty payment under protest triggers limitation period

The Tribunal held that the duty payment by Respondent, treated as under protest, started the limitation period from the date of Commissioner (Appeal)'s ... Refund - Limitation Issues involved: Detection of shortage of marble slabs involving central excise duty, payment by Respondent, show cause notice for appropriation of duty and penalty u/s 11AC, appeal based on Supreme Court's judgment on manufacture, refund application rejection based on limitation period.Detection of shortage and payment by Respondent: Central Excise officers found shortage of marble slabs involving duty during a surprise visit to Respondent's factory. Respondent paid the amount on the same date by debit entry in the PLA.Show cause notice and penalty u/s 11AC: Show cause notice issued to Respondent for appropriation of duty already deposited and penalty imposition u/s 11AC treating shortage as clandestine removal. Additional Commissioner confirmed duty demand, ordered appropriation of amount paid by Respondent, and imposed penalty equal to the duty amount.Appeal based on Supreme Court's judgment: Respondent appealed based on Supreme Court's judgment stating cutting marble blocks into slabs does not amount to manufacture. Commissioner (Appeals) allowed the appeal following the Supreme Court's judgment.Refund application rejection based on limitation: Respondent filed a refund application for duty and penalty paid. Jurisdictional Deputy Commissioner sanctioned the penalty refund but rejected the duty refund citing limitation. Commissioner (Appeal) allowed the refund holding the amount deposited during investigation as under protest, not invoking the limitation under Section 11B.Decision: The Tribunal held that the duty payment by Respondent, treated as under protest, started the limitation period from the date of Commissioner (Appeal)'s order. As the refund application was filed after the limitation period, it was deemed time-barred. The impugned order was set aside, and the Revenue's appeal was allowed.