Pre-deposit treated as payment under protest: refund of duty deposit not barred by limitation or Rule 233B compliance

A pre-deposit made before filing an appeal to contest a duty demand is treated as payment under protest, not as a voluntary duty payment. On that basis, refund of the amount is not barred by limitation under Section 11B of the Central Excise Act, 1944, and compliance with Rule 233B of the Central Excise Rules, 1944 is not mandatory. The refund claim was therefore maintainable, and the Revenue's challenge failed.

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Issues: Whether the amount paid before filing the appeal against the duty demand was a pre-deposit treated as payment under protest, so that the refund claim was not barred by limitation under Section 11B of the Central Excise Act, 1944 and the procedure under Rule 233B of the Central Excise Rules, 1944 was not mandatory.

Analysis: The Commissioner (Appeals) had applied the principle that a duty payment made for pursuing an appeal against the levy is treated as payment under protest. The Tribunal affirmed that the payment made before the appeal was filed was not a voluntary duty payment but a deposit made to contest the demand, and therefore the refund claim could not be defeated on the ground of limitation. The Tribunal also accepted that the refund was supported by the settled line of decisions holding that Section 11B and Rule 233B do not bar refund of such pre-deposit amounts.

Conclusion: The refund claim was not time-barred and was maintainable. The Revenue's challenge failed and was decided against the Revenue.

Ratio Decidendi: A payment made before filing an appeal to contest a duty demand is treated as payment under protest, and refund of such pre-deposit is not hit by the limitation under Section 11B of the Central Excise Act, 1944 or by non-compliance with Rule 233B of the Central Excise Rules, 1944.

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