2002 (4) TMI 65 - SC - Central Excise

Provisional excise duty paid under protest and final assessment adjustments u/r 9B: refund not barred by ss. 11A/11B

The dominant issue was whether refund of excise duty paid under protest pursuant to provisional assessment under Rule 9B was governed by the limitation ... Refund claims - excise duty under protest - Held that:- It is fairly not disputed by learned Counsel for the Revenue that the decision in Mafatlal Industries Limited [1996 (12) TMI 50 - SUPREME COURT OF INDIA] governs the appeals wherein held that ' Rule 9B provides for provisional assessment in situations specified in Clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that 'when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be'. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be.' Appeal allowed. Issues involved:Claim for refund of excise duty under protest; Interpretation of Section 11B of the Central Excise Act, 1944; Applicability of judicial decisions on refund claims.Analysis:The case involved the assessees claiming the benefit of an exemption notification and paying excise duty under protest. The matter reached the Customs, Excise and Gold (Control) Appellate Tribunal, which ruled in favor of the assessees. Subsequently, the assessees sought repayment of the duty paid under protest. The Revenue challenged this claim, citing the provisions of Section 11B of the Central Excise Act, 1944, which governs refund of excise duty. The amended Section 11B required refund applications to be made within six months from the relevant date, accompanied by necessary evidence. However, an exception to the six-month limitation was provided for duties paid under protest.In a subsequent development, the assessees were served notices to show cause why the excise duty amounts paid under protest should not be retained by the Revenue, in accordance with the amended Section 11B. Despite the assessees' efforts, the Tribunal upheld the Revenue's contention. However, a significant judicial precedent in Mafatlal Industries Limited v. Union of India was cited, where a bench of nine learned judges resolved a similar issue in favor of the assessees. The decision clarified that recoveries or refunds resulting from provisional assessments are not governed by Section 11A or Section 11B of the Central Excise Act, 1944.Acknowledging the precedent set by the Mafatlal Industries Limited case, the Court allowed the appeals and set aside the Tribunal's order. The judgment directed the consequential repayments to be made within twelve weeks, with no order as to costs. This ruling emphasized the importance of judicial decisions in interpreting and applying statutory provisions related to excise duty refunds, providing clarity on the applicability of Section 11B in specific scenarios.