Refund limitation and protest compliance: prior final departmental finding on payment under protest prevented rejection of the claim.

Refund was not barred by limitation where the assessees had disputed the levy from the outset, endorsed payment under protest, and sent a written protest to the authorities. A prior departmental order had expressly recorded that the demands were honoured under protest and was never appealed, so that finding attained finality and could not later be ignored by the refund authority. Rule 233B was treated as substantially complied with, and the department failed to disprove protest compliance. The claim therefore could not be rejected as time-barred on the footing of non-compliance with the protest procedure; the matter was remanded for verification of records and quantification of refund.

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Issues: Whether the refund claim was barred by limitation on the ground that duty had not been validly paid under protest in terms of Rule 233B, and whether the prior departmental order treating the payments as under protest bound the subsequent refund authority.

Analysis: The appellants had disputed the levy from the outset, made endorsements of payment under protest, and addressed a written protest to the authorities. The Assistant Collector's later order expressly recorded that the demands had been honoured under protest and proceeded on that basis while allowing the discount claim. That order was not appealed against and had attained finality. In these circumstances, the subsequent authority could not disregard the earlier finding on the character of payment. The rule requiring protest was treated as substantially complied with, and the burden to show non-compliance was not discharged by the department. The claim, therefore, could not be rejected as time-barred merely on the footing that Rule 233B had not been followed.

Conclusion: The refund claim was not hit by limitation for want of protest, and the assessee succeeded on that issue. The matter was remanded to the original authority to verify the records and quantify the refund payable.

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