Payment during a pending levy challenge treated as under protest, keeping the refund claim within limitation

Duty paid during the pendency of a bona fide challenge to the levy was treated as payment under protest, so the refund claim was not hit by the six months' limitation under Section 11B of the Central Excise Act, 1944. The Court distinguished the Revenue's reliance on later Supreme Court authority because that case addressed limitation in a different factual setting. On the present facts, the continuing contest to the levy kept the refund claim within time, and the refund was held maintainable.

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Issues: Whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944, or whether the duty payments made during pendency of the appeal were to be treated as payments under protest so as to keep the refund claim within time.

Analysis: The dispute turned on the character of the duty payment and the applicability of the limitation bar for refund. The earlier challenge to the levy was already pending when the subsequent duty was paid, and the Court treated such payment as having been made under protest in the context of the assessee's continuing contest to the levy. The Court distinguished the later Supreme Court authority relied on by the Revenue on the footing that it dealt with the starting point of limitation in a different factual setting, while the present case was governed by the principle that payment made during contest to the levy is deemed to be under protest. On that basis, the refund claim was held not to attract the six months' limitation under Section 11B.

Conclusion: The refund claim was not barred by limitation and was maintainable; the Revenue's appeal failed.

Ratio Decidendi: Where duty is paid during the pendency of a bona fide challenge to the levy, such payment is to be treated as payment under protest, and the refund claim is not defeated by the limitation period under Section 11B of the Central Excise Act, 1944.

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