Payment under protest defeats excise refund limitation where a clear disputed-liability letter was received by the department.

Excise duty paid on reconditioned drums was held not to be barred by limitation for payments made on and after 23-3-1970, because the assessee had already issued a clear protest disputing liability and the department's receipt of that protest was proved. The Tribunal treated the later payments as made under protest, so the refund claim for that period could not fail under Rule 11 of the Central Excise Rules, 1944. The argument that Rule 11 contained no saving for payments under protest was rejected in light of the Tribunal's earlier majority view. Refund was therefore allowed only for duty paid from 23-3-1970 onwards.

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Issues: Whether the refund claim for excise duty paid on second-hand metal containers was barred by limitation under Rule 11 of the Central Excise Rules, 1944, or whether the payments made from 23-3-1970 onwards were payments under protest and therefore outside the limitation bar.

Analysis: The decisive question was whether the assessee had established a general protest covering the disputed period. A letter dated 23-3-1970 expressly claimed general exemption from excise duty on the reconditioned drums and disputed liability to duty. Its receipt by the department was proved from the peon book. On that basis, the later duty payments were treated as having been made under protest, so the refund claim for those payments could not be defeated on limitation. The plea that Rule 11 contained no saving for payments under protest was rejected in view of the Tribunal's earlier majority view.

Conclusion: The refund claim was not barred by limitation in respect of duty paid on and after 23-3-1970, and refund was directed for that period; the assessee succeeded only to that extent.

Ratio Decidendi: Where excise duty is paid after a clear and received protest disputing liability, the subsequent payments are treated as made under protest and are not hit by the limitation bar under Rule 11 of the Central Excise Rules, 1944.

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