Refund of export duty paid under protest upheld where binding classification ruling made the higher duty rate inapplicable.

Refund of excess export duty paid under protest was held due where processed and upgraded ilmenite was correctly classifiable under the claimed chapter heading and the higher duty rate was not leviable. A prior tribunal ruling on the applicable classification had binding effect in the absence of any shown stay, so the Department could not refuse refund merely because an appeal had been filed. Duty paid under protest, when later found not payable, gave rise to refund entitlement. The refund refusal was quashed and the Department was directed to release the refund subject to the security arrangement in the order.

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Issues: Whether the petitioner was entitled to refund of excess export duty paid under protest on the ground that the goods were correctly classifiable under the relevant chapter heading and the higher rate of duty was not leviable.

Analysis: The petitioner had paid export duty under protest on processed and upgraded ilmenite. The applicable notifications reduced the export duty rate, and an earlier Tribunal decision had already held that ilmenite exported under the relevant classification fell under the chapter heading claimed by the petitioner. The refusal to entertain refund solely because the Department had preferred an appeal did not displace the effect of the binding tribunal decision, especially when no stay of that decision was shown. Duty paid under protest, if later found not leviable, gives rise to refund entitlement, and the assessee need not be driven to a further appeal where a binding ruling has already been ignored.

Conclusion: The petitioner was entitled to refund, and the order refusing refund was liable to be quashed.

Final Conclusion: The writ petition was allowed, the refund refusal was set aside, and the Department was directed to release the refund subject to the security arrangement directed in the order.

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