Judgment:
1. This appeal arises from Order-in-Appeal No. 35/02 CE. The appellant's refund has been rejected on the ground that it is barred by limitation in terms of Section 11B of CE Act, 1944. Although it has been clearly noted that the refund arises as a result of provisional assessment but both the authorities have noted that the duty was paid under protest, as they have not followed the Rule 233B of the CE Rules.
Therefore, the refund cannot be granted.
2. The learned Counsel submits that on finalization of the assessments, the refund becomes automatically refundable, hence there is no need for the assessee to file a refund application merely because they have sent a reminder in terms of refund application and it cannot be held to be time barred. Furthermore, the duty was paid under protest and the provisions of Rule 233B are only procedural. Non following of the said rules will not disentitle them from the claim of the refund. In this regard, the judgment rendered in the case of Mahalakshmi Industries v.CCE, Chandigarh reported in 1995 (8) ELT 352 is relied, wherein the Tribunal relying on several earlier judgments has clearly held that when the duty has been paid under protest, then in such a circumstance, non-compliance of procedure as laid down under Rule 233 B cannot be a ground for rejecting the claim. It has been held that the procedure laid down under the said Rule is only directory and not mandatory and mere procedural lapse cannot be a ground for denying the refund claim.
The learned Counsel also relied on the Apex Court judgment rendered in the case of Sinkhai Synthetics and Chemicals (P) Ltd. , wherein it has been held that duty paid under provisional assessment in excess of that finally assessed is liable for refund and is not hit by the principle of unjust enrichment. Further reliance is also placed on the Apex Court judgment rendered in the case of Mafatlal Industries Ltd. v. UOI 4. On a careful consideration of the submissions and perusal of the order, it is clear that the refund claim has arisen as a result of finalization of provisional assessment and the duty was paid under protest. Therefore, non following of the procedure under Rule 233B is not fatal for grant of refund claim; as the procedure laid down under Rule 233B is only directory and not mandatory as held by the Tribunal in the light of the several other judgments rendered in the case of Mahalakshmi Industries (supra). In terms of the Apex Court judgment rendered in the case of Sinkhai Synthetics (supra), the refund becomes due on finalization of assessment and the same is not barred by principles of unjust enrichment. Respectfully following the ratio of the noted judgments, the impugned order is set aside and appeal is allowed with consequential relief. The refund shall be made within three months from the receipt of this order along with interest in terms of the Board's letter and Apex Court judgments in this point.
(Operative portion of the Order was pronounced in the open Court on conclusion of hearing)