Full Judgment
2. The facts of the case are that the appellants filed a Classification List No. 1/86-87 under sub-heading 5406.11 of Central Excise Tariff 1985 for the product Mono Filament Yarn of HDPE and also indicated the effective rate of duty at Rs. 3.52 per kg plus additional duty. The Assistant Collector approved the classification list with the modification of the Tariff Heading 5406.11 to 5406.90. However, the rate of duty and other particulars as claimed by the assessee were not changed. The said classification list was approved on 26-7-1986. In the meanwhile during the period, between filing of the classification list and its approval, the appellants filed a letter of protest, having come to know that the product is chargeable to nil rate of duty. This letter of protest is dated 6-5-1986. In this letter, the appellants have stated that the product is fully exempted from the Central Excise duty under Chapter 54 and it is an article of plastic falling under Chapter 39, but as per the department's opinion, excise duty on Mono Filament Yarn of HDPE and strips of High Density is liable and therefore, duty is paid under protest under Rule 233B of the Central Excise Rules.
Subsequently they followed up the same by way of final refund claim.
The claim for the period from 26-6-1986 to 10-6-1988 was made on 12-9-1988 and the appellants, before filing the refund claim, filed another classification list during the year 1987 claiming nil rate of duty, which, after adjudicating by the Assistant Collector, was approved. But the refund claim was rejected on the ground that Classification list No. 1/86-87, which was approved on 26-7-1986, was not appealed against and hence no refund claim is admissible.
3. Shri S.R. Tripathi, the Ld. Consultant on behalf of the appellants, pleaded that the Assistant Collector has totally ignored the letter of protest, which was filed before the approval of the Classification list No. 1/86-87. The Assistant Collector ought to have passed an order disposing of the protest letter, which he has not done. The question of filing an appeal against the approval of the classification list, in view of the protest letter and payment of duty under protest for the subsequent period from 6-5-1986, did not arise. He therefore, pleaded that the orders of the authorities below are not legally sustainable and are required to be set aside.
4. Shri Naik, the Ld. SDR, on the other hand, pleaded that when they received the classification list (as per their own indication of the rate of duty without any amendment) duly approved and if the appellants feel that it is not correct, they should have appealed against the same, since the approval of classification is also an order or decision, which could be appealed against. Having failed to do that, the protest letter cannot come to their rescue. Even the protest letter should be deemed to have been disposed of, on approval of the classification list on 26-7-1986. Hence, the appellants ought to have filed the appeal against the approval of the classification list No.1/86-87. The refund claim cannot be entertained, when the duty has been paid as per the approved classification list.
5. After hearing both the sides, we find that the issue falls within the short campus as to whether during the period when the classification list was not approved, if the appellants having realised their mistake in indicating a wrong classification could file a letter of protest for purposes of saving limitation under Section 11B and whether it is necessary only to appeal against the classification list or not. We find that in this case the appellants claimed assessment at the rate of Rs. 3.52 per kg, which was approved by the Assistant Collector only on 26-7-1986. Meanwhile, they have filed a letter of protest on 6-5-1986 claiming nil rate of duty and since that date, are reported to have paid duty under protest. Such a letter of protest cannot be brushed aside without specifically disposing it of by an appealable order. Mere approval of a classification list filed earlier to the letter of protest, cannot be said to have disposed of the letter of protest. Hence, payment made under protest is saved from limitation.
6. We are also to observe that the statutory right conferred under Section 11B for claiming refund of duty cannot be taken away merely because of the fact that no appeal was filed against the approval of classification list. Sections 11A and 11B are independently available for operation, for demanding short levy by the Department or for claiming refund by the assessee, irrespective of whether appeal is filed on approved classification list or otherwise. In view of the settled legal position, if a letter of protest (a prelude to save limitation for filing refund claim) is lodged before approval of classification list, that has to be considered and rejected by the Assistant Collector. In view of this, we set aside the orders of authorities below and remand the case back to the Assistant Collector for considering the letter of protest dated 6-5-1986 and if on that basis, refund is admissible on merits, the claim should be entertained and refund granted.