Retrospective validation of exempted-clearance recovery defeats refund claim despite payment under protest.

Retrospective validation under Section 82 of the Finance Act, 2005 was treated as curing the earlier absence of express authority to recover 8% of the value of exempted clearances, so the appellant could not claim refund of amounts paid on that basis. The fact that the payments were made under protest did not override the statutory amendment or invalidate the recovery mechanism for the relevant period, and the refund rejection was sustained.

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Issues: Whether the appellant was entitled to refund of the amount paid towards 8% of the value of exempted clearances in view of the retrospective validation introduced by Section 82 of the Finance Act, 2005.

Analysis: The refund claims arose from payments made in respect of clearances of goods manufactured with common inputs and treated as exempted clearances for the relevant periods. The earlier appellate order had taken the view that there was no provision to recover 8% of the sale value during the period of dispute, but the refund proceedings were decided after the retrospective amendment. The retrospective insertion was treated as validating the recovery mechanism for the relevant period, and the appellant's contention that the payment was under protest did not displace the effect of the statutory amendment.

Conclusion: The refund was not allowable and the rejection of the refund claim was sustained.

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