1984 (5) TMI 258 - AT - Central Excise

Tribunal Allows Refund Claim Despite Limitation

COLLECTOR OF CENTRAL EXCISE, CALCUTTA Versus STEWARTS AND LLOYDS OF INDIA LTD., CALCUTTA

COLLECTOR OF CENTRAL EXCISE, CALCUTTA Versus STEWARTS AND LLOYDS OF INDIA LTD., CALCUTTA - 1985 (22) E.L.T. 522 (Tribunal) Issues Involved:1. Classification of goods under Item 68 or Item 26AA.2. Legality of the refund for the period from 1-3-1975 to 16-7-1979.3. Validity of the protest lodged by the respondents.4. Application of Section 11B regarding the limitation period for refunds.5. Compliance with procedural requirements for appeal under Section 35B(2).Issue-wise Detailed Analysis:1. Classification of goods under Item 68 or Item 26AA:The respondents, manufacturers of various iron and steel piping products, were initially classified under Item 26AA and exempted from duty. Post 1-3-1975, the local Central Excise Officer reclassified these goods under Item 68, making them liable for duty. The respondents did not formally appeal against this reclassification but paid the duty under protest. The Assistant Collector upheld this classification, but the Central Board of Excise and Customs later determined that items i to vii were correctly classifiable under Item 26AA and thus exempt from further duty, while items viii to xi remained under Item 68.2. Legality of the refund for the period from 1-3-1975 to 16-7-1979:The Assistant Collector sanctioned a partial refund for the period from 14-8-1980 to 30-3-1981, arguing that duties paid prior to 14-8-1980 were correctly paid as the classification lists were legally in force. The Appellate Collector, however, directed a full refund, holding that the respondents had protested the classification from the beginning. The Tribunal found that the respondents had consistently protested the classification and were allowed to pay duty under protest, thus entitling them to a refund from 1-3-1975.3. Validity of the protest lodged by the respondents:The respondents claimed they protested the classification from 1-3-1975, which the Department contested due to lack of formal evidence. However, the Tribunal noted that internal correspondence within the Department indicated that the respondents were allowed to pay duty under protest. The Tribunal found no evidence that the respondents' protests were ignored or rejected, thus validating the continuous protest and entitling them to a refund.4. Application of Section 11B regarding the limitation period for refunds:Section 11B stipulates that the limitation period of six months for refund claims does not apply if duty is paid under protest. The Tribunal held that since the respondents paid duty under protest, the limitation period did not apply, and they were entitled to a refund for the entire period from 1-3-1975 to 30-3-1981.5. Compliance with procedural requirements for appeal under Section 35B(2):The respondents argued that the appeal should be dismissed because the appellant failed to comply with the Tribunal's order rejecting the stay application and lacked proper authorization. The Tribunal did not find this argument compelling but focused on the merits of the case, ultimately deciding in favor of the respondents based on the continuous protest and the legal provisions under Section 11B.Conclusion:The Tribunal rejected the appeal, affirming that the respondents were entitled to a full refund from 1-3-1975 to 30-3-1981. The continuous protest and the application of Section 11B were pivotal in the decision, ensuring that the limitation period did not bar the refund claim. The Tribunal also emphasized the importance of addressing the respondents' protests and the procedural fairness in handling their classification and refund claims.