Refund limitation under Central Excise law runs from the appellate order, while adjudication appropriation converts deposit into duty.

Amounts paid during investigation may start as a deposit, but once liability is confirmed in adjudication and the sums are appropriated towards duty, interest and penalty, they are treated as duty for refund purposes. Under Section 11B of the Central Excise Act, the one-year limitation runs from the relevant date, and where refund arises from an appellate reduction of demand, the relevant date is the appellate order itself. A refund application filed more than one year after that order is time-barred, so the refund is not admissible.

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Issues: (i) Whether amounts paid during investigation and adjudication are to be treated as duty or as deposit under protest. (ii) Whether the refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944 and whether refund is admissible.

Issue (i): Whether amounts paid during investigation and adjudication are to be treated as duty or as deposit under protest.

Analysis: Amounts paid during investigation before crystallisation of liability may initially bear the character of deposit. However, once the adjudicated liability is confirmed and the amounts are appropriated towards duty, interest, and penalty, the character of the payment changes. On appropriation in the Order-in-Original, the payment no longer remains a mere deposit and is treated as duty for the purposes of refund.

Conclusion: The amounts, upon appropriation in adjudication, are treated as duty and not as deposit under protest.

Issue (ii): Whether the refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944 and whether refund is admissible.

Analysis: Section 11B prescribes a one-year limitation from the relevant date. Where refund arises as a consequence of an appellate order, Explanation (B)(ec) fixes the relevant date as the date of that order. The right to claim refund accrued when the Order-in-Appeal reduced the demand, and pendency or dismissal of the Department's further appeal did not postpone the statutory starting point. The refund application filed beyond one year from that order was therefore beyond limitation.

Conclusion: The refund claim is barred by limitation under Section 11B and is not admissible.

Final Conclusion: The appeal fails because the payments had become duty upon adjudication and the refund was sought beyond the statutory period computed from the appellate order that created the refundable excess.

Ratio Decidendi: For refund arising from an appellate reduction of duty, the relevant date under Section 11B is the date of the appellate order itself, and amounts appropriated on adjudication are treated as duty for limitation purposes.

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