Refund of excise duty on molasses upheld where protest payment defeated limitation and a departmental letter could not bar statutory review.

Refund of excess excise duty on molasses remained maintainable because a prior departmental letter rejecting remission was only a non-adjudicatory communication and did not foreclose statutory examination of the refund claim. The claim was also not barred by limitation under Section 11-B of the Central Excise Act, 1944, as the duty had been paid under protest; the Court rejected the technical objection that the protest did not comply with Rule 233-B of the Central Excise Rules, 1944, and treated the relevant date under Explanation (B)(eb) as the date of adjustment after final assessment. The petitioner was held entitled to refund after adjustment of duty attributable to goods actually sold.

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Issues: (i) Whether the refund claim for excess excise duty on molasses was maintainable despite the Department's earlier communication rejecting remission, and (ii) whether the refund claim was barred by limitation under Section 11-B of the Central Excise Act, 1944.

Issue (i): Whether the refund claim for excess excise duty on molasses was maintainable despite the Department's earlier communication rejecting remission.

Analysis: The petitioner had paid duty in advance when permitted to store molasses in kutcha earthern pits. The earlier letter written by the Superintendent warning that remission could not be claimed later was not an adjudication by a competent quasi-judicial authority. A refund claim had to be examined under the statutory mechanism, and a mere departmental communication could not foreclose that right.

Conclusion: The refund claim was maintainable and the earlier communication did not bar adjudication of the claim.

Issue (ii): Whether the refund claim was barred by limitation under Section 11-B of the Central Excise Act, 1944.

Analysis: Section 11-B(1) permits refund within one year from the relevant date, but the limitation does not apply where duty has been paid under protest. The records showed that the duty had been paid under protest. The objection that the protest did not follow Rule 233-B of the Central Excise Rules, 1944 was rejected in light of the Supreme Court decision relied upon by the Court. The Court also noted that Explanation (B)(eb) to Section 11-B treated the relevant date as the date of adjustment of duty after final assessment in the kind of situation before it, so the claim could not be treated as time-barred.

Conclusion: The refund claim was not barred by limitation.

Final Conclusion: The petitioner was held entitled to refund of the excess duty, after adjustment of duty attributable to the goods actually sold, and the writ petitions were allowed.

Ratio Decidendi: Where excise duty is paid under protest and the statutory refund provisions define the relevant date accordingly, a refund claim cannot be defeated by a prior non-adjudicatory departmental communication or by insisting on a technical objection to the form of protest.

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