Decided on September 10,1991



K. Sankararaman, Member (T) - (1.) THE Collector of Central Excise, Patna has filed this application under Section 35C(1) of the Central Excises and Salt Act, 1944 for referring the following points to the Honourable High Court of Patna, the same arising from the order No. 586/Cal/90 dated 28-11-1990 passed by this Tribunal dismissing the appeal filed by the Collector and upholding the order-in-appeal passed by the Collector of Central Excise (Appeals), Calcutta: (i) Whether the A.C. and/or Hon'ble CEGAT, being creature of Central Excises and Salt Act, 1944, can travel beyond the restrictions/conditions imposed under Rule itself for availability of benefit of the Rule framed under the Act, itself. (ii) Whether in absence of endorsement "Duty paid under protest" on GP 1 and/or duty paying documents, the duty paid shall be treated as "Paid under Protest". (iii) Whether in the absence of representation to the Assistant Collector of Central Excise against Order, which necessitates payment of duty under protest, within three months of the date of delivery of letter of protest, the duty paid shall be treated as paid under protest and mere delivery of letter of protest to the Inspector/Superintendent shall be treated as sufficient compliance with the requirement of the Rule 233B granting benefit of duty paid under protest. (iv) Whether refund claim filed beyond six months from the date of payment of duty can be allowed when benefit of rule enlarging facility of payment of duty paid under protest is not available at all.
(2.) Shri M.N. Biswas, learned Senior Departmental Representative appeared for the applicant-Collector when the matter was posted for hearing. He adopted the reasoning spelt out in the application and urged that the respondents not having followed the procedure prescribed under Rule 233B as they had not endorsed the Gate Passes with the remark "Duty paid under protest" and had also not submitted a representation to the Assistant Collector within three months of the date of delivery of letter of protest, they cannot be said to have paid duty under protest and hence the refund claim lodged by them beyond a period of six months from the date of payment of duty was hit by limitation under Section 11A(1) as it was not covered by the proviso to the said sub-section whereby the said limitation shall not apply where any duty had been paid under protest. He urged that the reference may be made as prayed for as a point of law has arisen from the order of the Tribunal. Shri P.R. Biswas, learned Consultant for the respondents strongly opposed the arguments. He said it has been emphatically laid down by the Honourable Supreme Court that rules of procedure are designed to advance justice and should be so interpreted and not to make them penal statutes for punishing erring parties (AIR 1985 SC 1 in Sital Prasad v. Union of India). The same has been adopted in the Allahabad High Court in U.R Road Transport Corporation v. Income Tax Appellate Tribunal 1981 (159) ITR 642. Again, Supreme Court had observed Associated Cement Co. v. Commercial Tax Officer, Kota - AIR 1981 SC 1887 that while charging sections are interpreted strictly the machinery sections are not so interpreted. They are interpreted to suit the intention of the charging section and are not subject to rigorous construction. He also referred to the decision of the Bombay High Court precisely on the question of Rule 233B regarding payment of duty under protest. The High Court had held that the company had written a letter to the Assistant Collector intimating that duty was paid under protest and that was more than sufficient compliance with the requirement of Rule 233B. The Rules are procedural and cannot be treated as mandatory. Apart from these legal pronouncements, Shri Biswas pointed out that as a matter of fact the respondents had written a letter to the Superintendent endorsing a copy to the Assistant Collector wherein they had clearly stated that they did not agree with what the department had written in the show cause notice and that they were starting to deposit the excise duty under protest retaining the right of refund of the amount so deposited. They were never advised that this protest was of no avail and that they were required to take further steps. He, therefore, maintained that the Tribunal's order has been passed taking a correct view of the issues involved in the light of clear pronouncement of the legal position by the Courts and no reference is called for.
(3.) I have considered the arguments and perused the record. The letter of the respondents addressed to the Superintendent endorsing a copy to the Assistant Collector is a key document which is heavily relied upon by the respondents in support of their plea that duty had been paid under protest. For a proper appreciation of the position, the same is reproduced below :- JUDGEMENT_5494_TLCE0_19910.htm We are in due receipt of your show cause notice which is received in our office on 6th October, 1982. We do not agree to what you have written and we are sending a proper reply to show cause in due course of time. Meanwhile if our combined clearances are to be taken then we have already crossed the 7.6 lakhs about 20 days before receipt of your show cause. Since we do not agree that we are not entitled to separate clearances. Even if total combined exemption upto 7.5 lakh is only available then also we have not enjoyed the limit as 100,% duty free clearance made to parties using for industrial purpose are not to be included. Our understanding is that we have to enjoy 7.5 lakh duty free clearances and all clearances made to parties enjoying 100% exemption are not to be included in 7.5 lakhs. Since 80% of our clearances made so far are to parties using gas for industrial purpose therefore we have not reached the limit of 7.5 lakh duty free clearances. Anyhow till this issue is decided we are starting to deposit excise duty under protest and retain the right of refund of the amount so deposited. Since we were not aware that we will have to deposit excise duty all or sudden a huge financial burden has fallen on us and therefore please allow some 10 days time to deposit the full amount, i.e. for all the clearances made so far since we crossed 7.5 lakhs clearances & the current clearances, we are making. We hope you understand our position and allow us some time for the same as asked for.";

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