| SooperKanoon Citation | sooperkanoon.com/32686 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Oct-15-2003 |
| Judge | S T Gowri, A Wadhwa |
| Appellant | Prakash Cotton Mills Ltd. |
| Respondent | Cce |
1.1. As per facts on record, the appellants were engaged in the manufacture of various excisable goods during the period from 1.4.92 to 12.5.94. The appellants paid duty on the yarn used in the manufacture of fabrics which are exported. It is an admitted position that during the relevant period, the appellants, though had applied for 100% E.O.U.approval, were not having the said status, which was granted to them only on 13.5.94. With the grant of 100% E.O.U., the appellants became entitled to the benefit of exemption Notification o. 123/81 dated 2.6.81. However, during the period in question, they were clearing the goods on payment of duty pending approval of their unit as 100% E.O.U.The appellants claimed the refund of duty paid during the period from 1.4.92 to 12.5.94 under their Refund Application dated 3.8.94. The said Application was returned back to them with directions to file the claim in a proscribed form. The same were subsequently filed on 28.3.95.
1.2. The appellants were issued a show cause notice proposing denial of the claim on the ground that the same was barred by limitation. The said show cause notice was adjudicated by the Assistant Commissioner who by taking the date of filing as 28.5.95, rejected the claim as hit by limitation. On an appeal against the same, the Commissioner (Appeals) accepted the appellant's contention that the very first letter dated 3.8.94 has to be considered relevant for the purposes of deciding the limitation, but observed that inasmuch as the same is also beyond the normal period of limitation of six months, the refund claim cannot be sanctioned. Accordingly, the upheld the Order of the original adjudicating authority. Hence the present appeal.
2. Shri V. Shridharan, learned Advocate appearing for the appellants very fairly admits that even taking 3.8.94 as the relevant date, the refund claim would be barred by limitation being beyond the period of six months from the relevant date.
3. However, he submits that in the peculiar facts and circumstances of the present case, the duty should have been considered having been paid number protest. he draws our attention to the correspondence with the Department, vide which they were constantly pursuing their registration as 100% E.O.U. and had approached the Revenue for giving them the proper guidance to clear the goods in the meanwhile during the pendency of their application. He submits that the cumulative effect of the various letters written by the appellants pending finalisation of their registration, have to be treated as if the appellants had paid the duty under protest, though they fairly agree that there is nothing in the letters to show that the appellants would be paying duty under protest.
4. For the above proposition, learned Advocate has placed reliance on the various decisions which we would be taking note of.
5. Sri J.M. George, learned J.D.R. for the Revenue submits that the entire correspondence relied upon by the learned Advocate in support of his contention that the duty been paid under protest, only relates to procurement of the Registration Certificate as 100% E.O.U. and there is nothing in the said letter to show that during the pendency of grant of such status, the appellants would be paying duty under protest. Learned J.D.R. also submits that the provision of Rule 233B are quite clear, and lay down a definite procedure required to be followed by the assessee in case of any dispute between the assessee and the Revenue.
6. We have considered the submissions made by both sides and have gone through the correspondence referred to by the learned Advocate.
Admittedly, the appellant were not given the status of 100% E.O.U.during the relevant period, which status came to have been conferred only on 13.5.94. The application for registration of 100% E.O.U. was made for the first time on 10.12.92. Thereafter, on 29.12.92, the appellants addressed a letter to the Assistant Commissioner requesting him to guide them the procedure required to be followed for clearing the goods under Duty Exemption as per 100% E.O.U. Scheme. The above letter was followed by subsequent reminder. In the said reminder, the appellants sought guidance for the procedure to be followed by them.
There is no utterance of the fact of payment of duty under protest in the said letters. The appellants have contended that though there is no express assertion in the said correspondence to pay duty under protest, but the very fact that the appellants were claiming the benefit of Notification No. 123/81 which exempts 100% E.O.U. from payment of duty, should be considered as duty having been paid under protest.
7. However, we do not find any merits in the above contention of the learned Advocate. The appellants were clearing the goods on payment of duty during the relevant period being fully aware that on grant of 100% E.O.U. Status, they would be entitled to the benefit of Notification No. 123/81. Another question is that they were only pressing the authorities for grant of early registration as 100% E.O.U., inasmuch as on its registration, they would be able to avail the benefit. In one of the two letters, they also sought guidance of the Revenue to clear their goods pending decision of their 100% E.O.U. status. However, while seeking guidance to such procedure, they never showed their intention to clear the goods on payment of duty under protest. Shri Sridharan, learned Advocate's argument that such claim of the benefit of Notification pending their registration by itself should be considered as payment of duty under protest, does not appeal to us, inasmuch as there is a specific procedure as contained in the provisions of rule 233B requiring the assessee to follow the same in case they intend to pay duty under protest. The Courts by its various judicial pronouncements has extended the benefits under the said rule even if the same has not been adhered to in letter and spirit, and even if there has been some deviation there from, in some of the cases. But in the instant case, we find that even the intention of paying duty under protest is not reflected in the correspondence made by the appellants with the Revenue, in which case the benefit cannot be extended to them.
8. Shri Sridharan, learned Advocate has referred to the Hon'ble Supreme Court's decision in he case of Ex. Engr. Workshop Div., M.P.Electricity Board Vs. Commissioner of Central Excise, Raipur reported in 1997 (94) ELT -445 (SC). However, we find in the said decision that the Hon'ble supreme court took note of the appellants' letter dated 30.11.76 wherein they had made it clear that the provisions of Central Excise regarding obtaining of licence and payment of excise duty may not be applicable to them. As such, they were submitting their application for licence under protest. The Hon'ble supreme Court has observed that the expression - 'under protest' - as appearing in the said letter would not relate to obtaining of licence only, but would also related to the liability of the appellants to pay duty, which was disputed by them. As such, the Hon'ble Supreme Court observed that the payment of duty has to be considered as having been made under protest.
In the instant case, there is not even as whisper of 'under protest' in any of the correspondence place on record by the appellants. As such, the ratio of the said decision does not apply.
9. Similarly, in another judgment referred to by the learned Advocate as reported in 1997(93)ELT -448 (Tribunal) in the case of Precision Drilling Equipments (I) Ltd. Vs. Commr. of C.Ex., Meerut, the duty was held to have been paid under protest by interpreting the letter written by the appellants, vide which they had made their intention clear to avail the benefit of exemption Notification as also on the fact that the gate passes for the relevant period has the endorsement of the duty having been paid under protest. In the present case, though the appellants repeatedly asserted that the 100% E.O.U. registration be granted to them urgently so as to entitled than to avail the benefit of the Notification in question, they never indicated that during the pendency of such registration, they would be paying the duty under protest. As contra to the precision Drilling decision, there is nothing on record to show the endorsement of any duty paying document or record with the expression, "under protest".
10. The appellants have also referred to the Tribunal's decision in the case of Delta Industries Ltd. vs. Collector of Central Excise, Calcutta reported in 2001(134) ELT -112 (Tri-Kolkata), wherein the Tribunal observed that the appellants were forced by the Department to procure the duty paid-back sheets for use in the 100% E.O.U. and thereby prevent them from availing the benefit of Notification No. 123/81-CE.We find that the facts in that case were entirely different from the facts of the prevent case and the ratio of the same does not apply to this case. Similarly, the appellants' reliance on the Tribunal's decision in the case of 2002(149)ELT-1347 (Tri.-Del.) in the case of Collector of Central Excise, Madras Vs. Superintending Engineer, T.N.E.B., does not come to their rescue, inasmuch as admittedly in that case, the appellants had filed a Classification List claiming the non-excisable status of their goods, which Classification List stood duly approved by the Revenue, but the same was received by the assessee after a long time, during which period the assessee went on paying duty at higher rate. It was, in those circumstances, the Tribunal observed that the filing of Classification List itself can be considered as a protest especially when the same was approved by the Revenue subsequently. In the present case, the benefit of the Notification was available to the appellants only upon their registration and during which period, the appellants had occasion to clear the goods on payment of duty under protest. This having not been done by them, the subsequent filling of refund claim after a lapse of a period of six months, cannot be entertained.
11. We find that in a recent decision, the Tribunal in the case of Shree Shyam Filaments Vs. Commissioner of C.Ex., Jaipur reported in 2002-TaxindiaOnline- -CESTAT-Del has taken note of the Supreme Court's decision in the case of Mafatlal Industries Vs. U.O.I. reported in 2002-TaxindiaOnline- -SC-CX which has held that any person paying duty under protest has to follow the procedure prescribed by the Rule, and has laid done that in terms of Rule 233B, Sub-Rule (7), '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.' The refund Claim in the said decision was held to be barred by limitation, even though there were two letters on record disputing the levy of duty on transportation/delivery charges, insurance charges with a request to review not to insist upon the recovery. The said two letters were considered by the Tribunal as only conveying the assessee's point of view and were held to be not letters of protest. For better appreciation, we reproduce para 6 of the said decision below: - "6. We have considered the submissions of both the sides. As per provisions of Section 11B(1) of the Act any person claiming of refund of any duty has to make an application before the expiry of six months from the date of payment of duty. As per second proviso to sub-section (1) of Section 11B, the limitation of six months shall not apply where any duty has been paid under protest. Rule 233B of the Central Excise Rules, 1944 prescribes the procedure for paying duty under protest. As per this Rule, the assessee has to deliver a letter fro paying duty under protest giving the grounds thereof, an endorsement 'Duty paid under protest' shall have to be made on all gate passes & RT-12, either appeal is to be filed or he has to make a representation within three months of the delivery of the letter of protest and on service of the decision, he shall have no right to deposit the duty under protest. In the present matter the appellants have placed reliance on two letters dated 5.10.95 and 5.12.95 which according to them were letters of protest. On a perusal of these two letters, we agree with the submissions of the learned S.D.R. that these letters only conveyed their point of view and these were not in effect letters only conveyed their point of view and these were not in effect letters of protest as the appellants continued to make payment of duty for subsequent clearances also. Moreover, even if these two letters are regarded as letters of protest, they has not followed the procedure outlined in rule 233BN at all. In the decision relied upon by the learned Advocate, this Tribunal has held the payment of duty under protest as there was substantial compliance of the provisions of rule 233B. The Apex Court in Mafatlal Industries case 2002-TaxindiaOnline- -SC-CX has clearly held that 'A reading of the rule shows that the procedure as prescribed therein in evolved only with a view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not. Any person paying the duty under protest has to follow the procedure prescribed by the Rule and once he does so, it shall be taken that the has paid the duty under protest.' (Emphasis provided) Rule 233B also contains the provision [sub-rule (7)] according to which '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.' In view of these facts we hold that the duty was not paid under protest and accordingly refund claim is hit by the time-limit specified in Section 11B of the Central Excise Act." 12. In view of the foregoing discussions, we do not find any merits in the appeal and accordingly, reject the same.
1. With respect, I do not find it possible to subscribe to the view contained in the eleventh paragraph of the preceding order than an assessee who has not complied completely with the provisions of Rule 233B cannot be said to have paid duty under protest. The decision of the Tribunal in Shree Shyam Filaments vs. CCE 2002-TaxindiaOnline- -CESTAT- which has taken this view has not, in my opinion, reflected the complete position contained in the Supreme Court judgment in Mafatlal Industries. 2002-TaxindiaOnline - -SC-CX in paragraphs 84 and 85 of the reported judgment, the majority of the bench of the Supreme Court considered the submission that the authority to whom the letter of protest under Rule 233B is submitted may refuse to record the protest if he was not satisfied with the grounds. The majority said that the rule empowered the proper officer to acknowledge letter of protest delivered to him and that "a reading of the rules shows that the procedure as prescribed therein is evolved only with view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not." The sentence following this, reproduced in Shree Shyam Filament has to be read in this context. It does not support the view that unless the provisions of Rule 233B are fully complied with duty cannot be said to have been paid under protest. Where it is clear either rom the conduct of the assessee or from its communication, that it disputes the payment of duty, the duty must be considered to have been paid under protest, and the limitation of six months will then not apply. The Supreme Court itself has, in paragraph 83 and 86 referred to two methods of payment of duty under protest - where a person proposes to contest the liability to duty by way of appeal, revision or in the higher courts or when the duty is paid under the orders of courts, therefore it is not essential for duty to be paid under protest, with the formal protest as specified in Rule 233B has to be launched.
2. Having said this, it is not possible for me to conclude that he appellant before us has indicated in any manner its intention to pay duty under protest. The entire correspondence between the appellant and the department that is relied upon in this regard consists of an application dated 10th December 1992 for registration under the Act a letter of 15th December informing the jurisdictional officer of its compliance with this requirement on the application a letter of 29th December requesting the jurisdictional Asst. Collector to guide them regarding the procedure to be followed for clearing goods under the 100% EOU scheme and two reminders each to the Asst. Collector and to the Superintendent, all of 1993. In none of these is there any indication that the assessee was being put to difficulty and that it was being compelled to pay duty which would otherwise not be payable.
No doubt there is a reference in a couple of these reminders to the urgency of the matter. This however by itself does not justify drawing the conclusion that the payment was made under protest and that the appellant did not wish to pay duty, but was compelled to pay it because of the department's negligence. It is not possible to consider a request for action without delay to be an expression of a desire not to pay duty on the ground that such duty was not payable. A contrary inference, that while it would be desirable for the appellant to have the 100 EOU registered quickly, it did not face any great hardship or difficulty in the absence of these registration can be equally legitimately drawn from the content and tenor of these letters.
3. I therefore agree that in not having been established that the duty was not paid under protest, the claims are barred by limitation.