Reserved price-list claims and duty under protest can be reopened for merits review despite prior approval

Where a price list expressly reserves the assessee's claim for exclusion of post-manufacturing expenses and duty is paid under protest, approval of that price list does not amount to a final adverse decision on the reserved claim. The authorities cannot treat the earlier approval as conclusive against the assessee on that point or reject a refund claim merely because no appeal was filed against the approval. The matter was therefore remanded for fresh consideration on merits, including verification of admissible expenses and consequential refund in light of the applicable Supreme Court decisions.

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Issues: Whether the rejection of the refund claim on the preliminary ground that no appeal had been filed against the earlier price-list approvals was correct, and whether the matter should be remanded for consideration of admissible post-manufacturing expenses.

Analysis: The price lists contained an express reservation of the assessee's right to claim exclusion of post-manufacturing expenses, and duty was paid under protest in accordance with Rule 173C(8) of the Central Excise Rules, 1944. The approval of the price lists did not record any decision on that claim, nor did it amount to an implied rejection of the assessee's reserved contention. Since no adverse order on that issue had been passed at the approval stage, there was no occasion to challenge the approvals by appeal, and the authorities below were not justified in treating the earlier approvals as final against the assessee on this point.

Conclusion: The preliminary rejection was unsustainable. The appeal was allowed and the matter was remanded to the Assistant Collector for fresh disposal on merits in the light of the applicable Supreme Court decisions, with liberty to call for fresh quantification and grant consequential refund after verification.

Ratio Decidendi: Where a price list reserves a claim and duty is paid under protest, approval of the price list without dealing with that reserved claim does not constitute a final adverse order on the claim, and the matter may be reopened for merits consideration.

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