Refund protest in excise must clearly cover the disputed classification; valuation objections alone are not enough.

Correspondence relied on as a protest for refund purposes must, on a fair reading of the letters and surrounding circumstances, clearly relate to the disputed levy or classification. Letters dated 2-2-1973 and 14-3-1973 were read as confined to the includibility of freight or handling charges in assessable value. They did not amount to a protest against classification or rate of duty, and the later classification dispute could not be brought within that earlier correspondence. The protest was therefore limited to valuation, not to the excess duty claim based on classification.

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Issues: (i) Whether the letters dated 2-2-1973 and 14-3-1973 constituted a protest under Section 11B of the Central Excises and Salt Act, 1944. (ii) Whether any protest evidenced by those letters related only to valuation or also extended to rate of duty or classification.

Issue (i): Whether the letters dated 2-2-1973 and 14-3-1973 constituted a protest under Section 11B of the Central Excises and Salt Act, 1944.

Analysis: The reference was treated as competent because construction of correspondence may raise a question of law. On the facts, however, the letters were read in the setting in which they were written, together with the assessee's conduct and subsequent admissions. The materials showed that at the time of the letters the only live dispute concerned inclusion of freight or handling charges in the price, while the classification dispute arose only later after the Bombay High Court ruling. The letters did not evidence a protest against the classification under which duty had been collected.

Conclusion: The letters did not constitute a protest under Section 11B in relation to classification or the excess duty claim.

Issue (ii): Whether any protest evidenced by those letters related only to valuation or also extended to rate of duty or classification.

Analysis: The first letter was found to concern the includibility of freight or handling charges in the assessable value. The second letter, when read with the first and the surrounding circumstances, did not widen the protest to include classification; the expression used could not be stretched to cover that distinct controversy. The absence of any similar protest in later years also supported the conclusion that the protest was confined to valuation.

Conclusion: The protest related only to valuation and not to rate of duty or classification.

Final Conclusion: The reference was answered against the assessee, and the Tribunal was directed to dispose of the appeal in accordance with that answer.

Ratio Decidendi: Where correspondence is relied on as a protest for refund purposes, it must, on a fair reading of the document and surrounding circumstances, clearly relate to the disputed levy or classification; a protest confined to valuation cannot be expanded to cover a later or distinct classification controversy.

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