TaxTMI 
TaxTMI 
2014 (9) TMI 146
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.... in terms of Rule 233B of the Rules." 2. The questions aforesaid have arisen because of a claim made by the applicant-assessee on 25-6-1998, seeking refund of the differential duty amounting to Rs. 14,92,578/- paid by them in respect of the additions on account of transportation, insurance, handling and delivery charges to the assessable value of goods cleared. According to the assessee, the payment in question was under protest whereas, according to the revenue, there was no proper protest with compliance of the requirements of Rule 233B of the Central Excise Rules, 1944 ('the Rules'/'the Rules of 1944'). 3. The relevant facts and background aspects of the matter are in a narrow compass and could be noticed in the following : The assessee M/s. Shree Shyam Filament Ltd. had been manufacturing synthetic filament yarn falling under Chapter 54 of the First Schedule to the Central Excise Tariff Act. The case of the assessee had been that under intense pressure of the department, they had paid, during the period 6-12-1995 to 22-10-1997, the differential duty in respect of the additions to the assessable value of goods on account of transportation, insurance, handling and del....
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....continuous 'insistence and pressure for recovery of the same would be unjustified and against the principle of natural justice.' 6. It was urged by the assessee before the Tribunal that they had been contesting the legality of the levy from the very beginning and it was only under the threats that the duty was deposited by them and thus, it was nothing but payment of duty under protest. The assessee relied upon the decision in the case of India Cements Ltd. v. Collector of C. Ex. - 1989 (41) E.L.T. 358 (S.C.), wherein the Hon'ble Supreme Court has held such a letter to be in the nature of protest. It was also the contention of the assessee that no form had been prescribed under Rule 233B of the Rules for lodging the protest; and that the procedure prescribed under Rule 233B was only directory and, therefore, the procedural lapse could not be a ground to deny the refund claim so long as there had been a protest lodged in the matter. 7. The revenue, on the other hand, submitted that as per Rule 233B(1) of the Rules, an assessee desirous to pay duty under protest was required to deliver to the proper officer a letter to this effect and to state the grounds for payment of d....
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.... the Act in this Court, being Reference Application No. 16/2003. A Division Bench of this Court, while taking note of the background aspects and on the prima facie opinion that lodging of the letters dated 5-10-1995 and 5-12-1995 amounted to making payment under protest, which would take out the claim of refund from the arena of period of limitation, directed the Tribunal to state the case and refer the questions for decision of this Court. Accordingly, the questions, as noticed hereinbefore, have been referred by the Tribunal. 11. The learned counsel for the applicant-assessee has referred to the said letters dated 5-10-1995 and 5-12-1995 and submitted that these letters establish beyond doubt that the applicant-assessee had always been contesting the department's claim for differential duty in question and regularly agitated that no such duty was payable on the wrong addition of freight, insurance, handling and delivering charges to the assessable value of goods. According to the learned counsel, after regularly disputing the department's claim, if the assessee made the payment because of intense pressure of the department and under the threat of coercive proceedings, the p....
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....gate-passes of clearance under protest have to carry such indication and such a procedure having not been followed, the assessee will be deemed to have paid the duty without protest as per sub-rule (8) of Rule 233B. 13. We have given anxious consideration to the rival submissions and have examined the record with reference to the law applicable. In order to appreciate the issues involved, appropriate it would be to take note of the provisions of law applicable to the case as also the principles expounded in the cited decisions. 14. Sub-section (1) of Section 11B of the Act, as then applicable, being directly relevant for the present purpose, could be noticed as under :- "11B. Claim for refund of duty. - (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in Section 12A as the applicant may furnish to establish that the amount of duty of excise in relation t....
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....under protest during the period available to him for filing an appeal or revision, as the case may be, and during the pendency of such appeal or revision, as the case may be. (8) If any of the provisions of this rule has not been observed, it shall be deemed that the assessee has paid the duty without protest. Note : A letter of protest or a representation under this rule shall not constitute a claim for refund." 16. In Mafatlal Industries' case (supra), after taking note of the contentions in regard to this Rule 233B, the Constitution Bench laid down the law in the following :- "85. The rule no doubt requires the assessee to mention the "grounds for payment of the duty under protest" but it does not empower the proper officer, to whom the letter of protest is given, to sit in judgment over the grounds. The assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law. All that the proper officer is empowered to do is to acknowledge the letter of protest when delivered to him - and that acknowledgment shall be the proof that the duty has been paid under protest. A reading of ....
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....; ------ 10. We gave our anxious considerations to the rival submissions. A perusal of the letter dated June 11, 1974 clearly shows that all possible contentions which could be raised against the levy of duty on the value of packing material were raised. If this could not be said to be a protest one fails to understand what else it could be. It does not require much time to analyse the contents of the letter. An ordinary reading with common sense will reveal to anybody that the appellant was not accepting the liability without protest. We have no hesitation to hold that the letter was in the nature of protest. That being the position, the question of limitation does not arise for refund of the duty." 18. In ITC Ltd. (supra), the Hon'ble Madras High Court took note of the observations of the Hon'ble Supreme Court in Mafatlal Industries and said, - "......The observation in the said paragraph "any person paying the duty under protest has to follow the procedure prescribed by the rule" does not mean that Rule 233B could be construed in a narrow, pedantic or hyper technical manner. In our opinion Rule 233B, as interpreted by the decisions of the Supreme Court referred....
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....hether on the facts and in the circumstances of the present case, the letters dated 5-10-1995 and 5-12-1995 amount to lodging of protest as required in terms of Rule 233B of the Rules; and whether the Tribunal was right in rejecting the assessee's refund claim as time-barred. Both the questions are, obviously, inter-related and the answer to question No. 1 depends on the answer to question No. 2. 23. Appropriate it would be to take note of the contents of the two letters, said to be of lodging of protest by the applicant-assessee. In the letter dated 5-10-1995, the assessee stated in relation to the duty in question as under :- "1. Under valuation short payment of duty on the amount charged in excess in the name of insurance charges - In this connection, please be informed that we are preparing a complete detailed statement for insurance charges charged on all invoices raised by us during the period from April, 1994 to March, 1995. 2. Short levy of duty on amount charged in case of transportation/Delivery Charges : In this connection, your kind attention is invited to the judgment of the Hon'ble Supreme Court in case of MRF Tyre - 1995 (77) E.L.T. 433 which clearl....
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....t is not in dispute that after the aforesaid two communications, the assessee did make payment of the differential duty in question in respect of addition to the assessable value of goods on account of transportation, insurance, handling and delivery charges for the clearances made during the period 1-3-1994 to 30-11-1996. The payment was made during the period 6-12-1995 to 22-10-1997. 26. The language and contents of the letter dated 5-10-1995, as reproduced hereinabove, leave nothing to doubt or guess that the assessee had pleaded, in unequivocal terms, with the department that duty was not payable on the additions made to the assessable value of goods towards transportation, insurance and handling/delivery charges. The contents of the letter dated 5-12-1995 further make it clear that despite the assessee having lodged the protest by the letter dated 5-10-1995, the department had been insisting for making such payment and hence the assessee put on record emphatic denial of the department's propositions; and the statement had been even to the extent that the insistence for such a payment would be unjust and against the principles of justice. 27. For their subject, cont....
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....ssessee's letters dated 5-10-1995 and 5-12-1995 had been of lodging of protest against the levy in question. 30. So far the requirement of following the procedure prescribed by the Rules is concerned, the same has to be construed from the practical stand point and cannot be employed in a hyper-technical manner. 31. The factors required to be taken into consideration in this case are that the payment was made during the period 6-12-1995 to 22-10-1997 whereas it related to the clearances made during the period 1-3-1994 to 30-11-1996. The assessee's letter dated 5-10-1995 was, in fact, a response to the communication dated 9-9-1995, as received from the Superintendent, Central Excise. It appears that the addition was sought to be insisted upon by the department at the later stage and hence came the protest from the assessee on 5-10-1995 which was followed by the communication dated 5-12-1995. When the department still insisted, the assessee made the payment. It is not in dispute that ultimately, the objections of the assessee were sustained. 32. In the totality of circumstances, it is very difficult to find as to how the requirements of sub-rule (4) of Rule 233B coul....