2026 (1) TMI 898 - AT - Central Excise

Duty paid on clearance of fly ash under protest - refund claim held not time-barred; denial set aside

Dominant issue: whether duty paid on clearance of fly ash under protest was barred by limitation and whether refund claim was maintainable. Reasoning: the ... Refund of duty paid on clearance of 'fly ash' under protest - fly ash fall under the category of excisable goods so as to attract levy of central excise duty or not - applicability of period of one year of limitation as per Section 11B of the Central Excise Act, 1944 - HELD THAT:- The appellant was asked to pay central excise duty even after the decision of Hon’ble Gujarat High Court in the case of M/s Ahmadabad Electricity Company Ltd. Vs UOI [2000 (4) TMI 48 - HIGH COURT OF GUJARAT AT AHMEDABAD] against which the SLP, filed by the department, was dismissed by the Hon’ble Supreme Court vide its order [2001 (11) TMI 1065 - SC ORDER] and also the decision of Hon’ble Madras High Court in [2015 (9) TMI 152 - MADRAS HIGH COURT] filed against show cause notice demanding duty on fly ash. The above letter clearly shows that taking note of the above judgment, appellant was paying duty under protest. No action was taken by the revenue’s authorities on the letter of protest filed by the appellant to either accept or reject the same. In the meantime Hon’ble Supreme Court has dismissed writ appeal filed by the revenue against the order of Hon’ble Madras High Court referred above. Subsequently, appellant claimed refund of the duty paid by them under protest, which is the bone contention in the present proceedings. It is found that the protest made by the appellant was never decided. Dismissal of the appeal/ SLP filed by the revenue against the order of Gujarat High Court in case of some other person would not amount to disposal of the protest made by the appellant. Hon’ble Supreme Court has in the case of M/s Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT] observed that 'at this stage that when the duty is paid under the orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise) pending an appeal/reference/writ petition, it will certainly be a payment under protest; in such a case, it is obvious, it would not be necessary to lodge the protest as provided by Rule 233B.' The crux of the decision of Hon’ble Supreme Court is that each person in respect of the proceedings of demand or refund filed, it is individual battle and the protest are to be initiated and complied in respect of the said person. In the present case, it is found that the protest made was not disposed of by the order of Hon’ble Supreme Court dismissing the Civil Appeal filed by the revenue in the case of some other person for the simple reason that appellant was not even party to that matter - it is found that the duty was paid under protest, the refund claim could not have been hit by the period of limitation. It is also brought to my knowledge that in the case of same appellant for his unit located in the jurisdiction of Lucknow Commissionerate refund claims have been allowed by the authorities. There are no merits in the impugned order and the same is set aside - appeal allowed. Issues: Whether the appellant's refund claim for duty paid on fly ash, paid under protest, is barred by the one-year limitation prescribed under Section 11B of the Central Excise Act, 1944, or whether the limitation period begins from the date of the judicial decision (relevant date) because the payment was made under protest.Analysis: The statutory framework of Section 11B(1) and the Explanation B thereto governs claims for refund of duty and prescribes the 'relevant date' for computation of limitation. The second proviso to Section 11B(1) excludes the one-year limitation where duty has been paid under protest. Explanation B contains clause (eb) (provisional payments) and clause (ec) (refund as consequence of judgment, decree, order or direction) which fix different relevant dates depending on the nature of payment. Rule 233B prescribes the procedure for payment under protest and requires delivery of a letter of protest and an acknowledgement, which constitutes proof of protest. Where a duty is paid under protest and the protest has not been disposed of by the proper officer, the running of the one-year limitation is effectively paused until resolution of the dispute; the limitation period begins from the relevant date as defined in the Explanation (e.g., date of judgment under clause (ec)). The Tribunal found that the appellant had paid duty under protest, that the protest remained undecided by the departmental authority, and that the Supreme Court decision in another partys case did not by itself dispose of the appellant's protest. The Tribunal also noted that interest claims will be governed by Section 11BB and applicable Supreme Court precedent for interest calculation.Conclusion: The refund claim is not barred by the one-year limitation under Section 11B because the duty was paid under protest and the relevant date for limitation is the date of the judicial decision resolving the dispute; accordingly the impugned order is set aside and the appeal is allowed in favour of the assessee.