1995 (9) TMI 143 - AT - Central Excise

Procedural Lapses Not Bar to Refund Claim: Tribunal Rules in Favor of Appellants

The Tribunal held that despite procedural lapses in following Rule 233B, the essence of protest was communicated by the appellants, entitling them to ... Refund - Payment of duty under protest Issues:1. Whether the appellants are entitled to a refund of duty paid for products under erstwhile T.I. 26AA(iii) falling under the category of bars exempted from Central Excise duty.2. Whether the appellants followed the prescribed procedure under Rule 233B of Central Excise Rules, 1944 for payment of duty under protest.3. Whether the failure to strictly adhere to the procedure under Rule 233B disentitles the appellants from claiming a refund.4. Whether the judgments cited by the appellants, including those of the Hon'ble Supreme Court and various Tribunals, support their claim for refund despite procedural lapses.Analysis:1. The appellants sought a refund of duty paid on products falling under erstwhile T.I. 26AA(iii) on the grounds that such products were exempted from Central Excise duty. They relied on Tribunal judgments to support their claim. The department contended that the appellants did not follow the prescribed procedure under Rule 233B, including submitting a letter of protest and endorsing the words 'under protest' on relevant documents. The Assistant Collector held that the refund claim was time-barred and lacked proper protest procedures. The Collector (Appeals) remanded the matter for reconsideration, leading to the present appeal.2. The appellants argued that despite not fully complying with Rule 233B, their submission of a letter of protest and endorsement of 'under protest' on certain documents should suffice for the refund claim. They cited the judgment of the Hon'ble Supreme Court in a similar case to support their position. The department contested this, emphasizing the importance of following the prescribed procedure for payment under protest.3. The Tribunal examined the appellants' actions in lodging protests and found that while the full procedure under Rule 233B was not strictly adhered to, the essence of protest was communicated to the department. Citing various judgments, including those of the Hon'ble Supreme Court and different Tribunals, it held that procedural lapses should not automatically disentitle the appellants from claiming a refund. The Tribunal emphasized that the procedure under Rule 233B is directory, not mandatory, and as long as a protest was lodged, the refund claim should not be rejected solely on procedural grounds.4. Relying on precedents such as the judgment in Collector of Central Excise v. Ashok Manufacturing Co. Ltd., the Tribunal concluded that the appellants' lodging of protest, despite procedural shortcomings, should be sufficient to support their refund claim. It highlighted that the rules are procedural and not mandatory. Therefore, the Tribunal ordered the original authority to proceed with determining the refund claim on its merits and dispose of the application in accordance with the law.