Revenue appeals dismissed as duty paid under protest exempts refund claims from Section 11B limitation period

CESTAT Kolkata dismissed Revenue's appeals against refund claims. The respondent had paid duty under protest, and Revenue rejected refund claims citing one-year limitation under Section 11B of Central Excise Act and failure to challenge bills of entry assessment. CESTAT held that when duty is paid under protest and protest remains unvacated by speaking order, the one-year limitation period doesn't apply. The refund claims were filed timely. Additionally, since duty was paid under protest, assessment wasn't final, making refund claims maintainable without challenging assessment. Revenue's appeals lacked merit and were dismissed.

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Issues Involved:
1. Limitation period for filing refund claims.
2. Requirement to challenge the assessment of bills of entry for refund claims.

Summary:

Limitation Period for Filing Refund Claims:
The respondent imported ready-made garments from Bangladesh and paid additional duty of customs (CVD) under protest. Following the Supreme Court's decision in SRF Ltd. v. Commissioner of Customs, Chennai, the respondent was entitled to the benefit of Notification No. 30/2004-CE, which exempted them from CVD. The respondent filed refund claims for CVD paid under protest, but these were initially rejected by the Revenue on the grounds of being time-barred, as they were filed beyond one year from the date of payment. The Tribunal held that since the duty was paid under protest, the time-limit prescribed u/s 11B of the Central Excise Act does not apply until the protest is vacated by a speaking order. Therefore, the refund claims were deemed to be filed in time.

Requirement to Challenge the Assessment of Bills of Entry for Refund Claims:
The Revenue argued that the refund claims were not maintainable without challenging the final assessment of the bills of entry, citing the Supreme Court's decision in ITC Limited v. Commissioner of Central Excise, Kolkata-IV. However, the Tribunal found that since the duty was paid under protest, it is deemed to be provisionally assessed. The Tribunal agreed with the Commissioner (Appeals) that the protest itself amounts to a challenge to the assessment, and thus, the refund claims cannot be denied on the ground that the assessment of the bills of entry was not challenged. The Tribunal upheld the Commissioner (Appeals)'s decision, which relied on various judicial precedents, including the case of Cincinnati Milacron Ltd. v. Commissioner of Customs (ACC), Mumbai, which held that payment of duty under protest is itself a challenge to the assessment on the bill of entry.

Conclusion:
The Tribunal dismissed the appeals filed by the Revenue, holding that the refund claims were filed within the permissible time frame and were maintainable without challenging the assessment of the bills of entry, as the duty was paid under protest.

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