Finality of appropriation order bars refund claim when the assessee does not challenge the adjudicatory appropriation.

An amount deposited during investigation was held not to become a deposit under protest where the subsequent adjudication imposed penalty and expressly appropriated the sum, and the assessee accepted that order by paying the penalty without challenge. Once the appropriation order was not appealed, it attained finality and bound the parties. A refund claim could not be maintained by disregarding that unassailed adjudicatory appropriation, even if the assessee asserted that the payment was not duty or that the order was erroneous. The refund claim was therefore not maintainable, and the order directing refund was set aside.

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Issues: (i) Whether the amount deposited during investigation could be treated as a deposit under protest rather than a voluntary payment. (ii) Whether a refund claim could be entertained after the original authority had appropriated the amount and the appropriation order had not been challenged.

Issue (i): Whether the amount deposited during investigation could be treated as a deposit under protest rather than a voluntary payment.

Analysis: The amount was deposited during investigation, but the original adjudication thereafter imposed a penalty and expressly appropriated the deposited sum. The subsequent conduct of the assessee, including payment of the penalty without challenging the order-in-original, showed that the original order was accepted and allowed to attain finality. In that situation, the characterization of the earlier payment could not override the later adjudicatory appropriation.

Conclusion: The amount was not liable to be treated, for refund purposes, as a deposit under protest in a manner that displaced the final adjudication.

Issue (ii): Whether a refund claim could be entertained after the original authority had appropriated the amount and the appropriation order had not been challenged.

Analysis: Once the Deputy Commissioner had passed an order appropriating the amount and that order was not challenged, the appropriation became final and conclusive. Even if the order was alleged to be erroneous or no separate adjudication of duty was said to have been made, the assessee could not ignore the unassailed appropriation order and seek refund directly. The refund claim was therefore barred by the binding effect of the original order.

Conclusion: The refund claim was not maintainable and the Tribunal was not justified in directing refund.

Final Conclusion: The appellate relief was granted to the Revenue, the Tribunal's order was set aside, and the orders rejecting the refund claim were restored.

Ratio Decidendi: A refund claim cannot succeed against an appropriation order that has become final and conclusive because it was not challenged in appeal; unassailed adjudicatory appropriation binds the parties until set aside.

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