Continuous protest preserves refund claims; Ayurvedic medicines excluded from residuary excise entry on classification principles.

Continuous, evidenced protest can preserve a refund claim from limitation even without a protest endorsement on every gate pass: written objections, licence applications renewed under protest, and PLA deposits marked under protest were sufficient, so the refund claim was not time-barred. Ayurvedic medicines also could not be placed in the residuary excise entry where a preceding tariff item excluded medicines exclusively Ayurvedic, Unani, Sidha or Homoeopathic; goods specifically referred to in an earlier item, even by exclusion, do not fall within the residuary entry. The assessee succeeded on both limitation and classification.

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Issues: (i) Whether the refund claim was barred by limitation under Section 11B despite the duty having been paid under protest. (ii) Whether Ayurvedic medicines were classifiable under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944.

Issue (i): Whether the refund claim was barred by limitation under Section 11B despite the duty having been paid under protest.

Analysis: The respondents had objected to the levy from the outset by written representations, applied for and renewed the licence under protest, and made PLA deposits marked under protest. The absence of protest endorsements on every gate pass was not decisive, because the record as a whole showed a continuing protest. Prior to the insertion of Rule 233B of the Central Excise Rules, 1944, there was no rigid statutory procedure for registering protest, but the essential requirement was that the protest and its reasons should be made clear, which was satisfied here.

Conclusion: The refund claim was not barred by limitation and the finding was in favour of the assessee.

Issue (ii): Whether Ayurvedic medicines were classifiable under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944.

Analysis: Item No. 14E excluded medicines which were exclusively Ayurvedic, Unani, Sidha or Homoeopathic. Item No. 68 was a residuary entry for goods not elsewhere specified. Applying the principle that goods specifically referred to in any preceding item do not fall into the residuary entry, even when the reference is by way of exclusion, Ayurvedic medicines could not be brought under Item No. 68. The explanatory amendment inserted in 1980 was noticed as having been made to overcome the contrary effect of the earlier judicial view, but the goods in question remained outside Item No. 68 on the relevant facts.

Conclusion: The goods were not classifiable under Item No. 68 and the finding was in favour of the assessee.

Final Conclusion: The order allowing refund was sustained because the claim survived limitation and the disputed goods were outside the residuary excise entry.

Ratio Decidendi: Where a assessee has continuously and demonstrably protested the levy, the refund claim is not defeated for want of a prescribed protest form; and goods expressly referred to in an earlier tariff item, even by way of exclusion, do not fall into a residuary entry for goods not elsewhere specified.

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