Refund under protest remains admissible when duty paid under an adjudication order is later set aside in appeal.

Duty paid under protest pursuant to an adjudication order that was later set aside in appeal remained refundable, and refund could not be denied for alleged non-compliance with Rule 233B or on limitation grounds under Section 11B. The filing of an appeal against the demand itself was treated as protest, and the assessee's letter and challans showed that payment was made under protest. Once the underlying demand was reversed, the duty deposited under that order became refundable, so the refund claim was admissible in favour of the assessee.

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Issues: Whether the refund of duty could be denied on the ground that the assessee had not complied with Rule 233B of the Central Excise Rules, 1944 and that the claim was barred by limitation under Section 11B of the Central Excise Act, 1944.

Analysis: The refund arose from duty paid pursuant to an adjudication order that was carried in appeal and later set aside in the assessee's favour. The duty payment was made under protest, as reflected in the assessee's letter and the challans, and the Revenue did not dispute that the payment followed the adjudication order under protest. In these circumstances, the procedural requirement under Rule 233B stood satisfied. The filing of an appeal against the demand itself constituted protest, and once the demand was set aside, the duty deposited pursuant to that demand became refundable.

Conclusion: The refund claim was admissible and could not be rejected for alleged non-compliance with Rule 233B or on limitation grounds; the decision was in favour of the assessee.

Ratio Decidendi: Where duty is paid under protest pursuant to an adjudication order that is subsequently set aside in appeal, refund cannot be denied for want of formal compliance with the protest procedure, and the duty so deposited becomes refundable.

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