P.G. Chacko, Member (J) - (1.)The appellants are manufacturers of a pharmaceutical product. In the year 1985, they had imported a consignment of Veratraldehyde, a raw material for their final product, Methyl Dopa. The importation was under the Duty Exemption Entitlement Certificate [in short, DEEC] Scheme. The imported raw material was warehoused with the Central Warehousing Corporation (CWC) at Alwar under transit bond dated 27 -2 -86 and against CWC warrant dated 14 -4 -86. The initial period of warehousing was up to 26 -5 -86. The period was extended from time to time at the instance of the importers, who were the appellants herein, and, accordingly, the warehousing period stood extended up to 26 -5 -87. The goods were cleared from the warehouse without payment of duty under the DEEC Scheme on 23 -9 -87. At the time of clearance, however, the Customs authorities insisted on payment of interest on duty for the period 27 -5 -86 to 23 -9 -87, which was paid 'under protest' by the party while clearing the goods. The protest was clearly endorsed in the TR -6 challan covering the payment of the interest amount of Rs. 1,58,761/ -. The importers/appellants filed a refund claim with the proper officer of Customs on 5 -9 -94. The Assistant Commissioner of Customs, by show -cause notice, proposed to reject the refund claim on the ground of limitation prescribed under Section 27 of the Customs Act, 1962. The proposal was contested by the party. In adjudication of the dispute, the Assistant Commissioner held that, in the absence of a valid letter of protest, the payment of interest was not liable to be accepted as having been made 'under protest' in terms of Section 27. The adjudicating authority held the refund claim to be barred by limitation under the second proviso to Sub -section (1) of Section 27 ibid. This decision of the Assistant Commissioner was upheld by the Commissioner (Appeals) in the appeal preferred by the aggrieved party. Hence the present appeal.
(2.)Ld. advocate Sh. R. Sudhinder for the appellants submits that, unlike under the Central Excise Act, there is no provision under the Customs Act which requires a claimant for refund to have filed a formal letter of protest at the time of payment of duty/interest so as to circumvent the limitation provisions of Section 27 of the Customs Act. Ld. Counsel submits that the protest was quite conspicuously recorded in the TR. 6 challan and that such protest was valid protest for purposes of Section 27 of the Act. Counsel further points out that the Supdt. of Customs had specifically made endorsement on the green copy of the relevant Bill of Entry to the effect that the party had disowned liability to pay duty on the imported material under the DEEC Scheme. Ld. Counsel further submits that grounds of protest were not relevant for purposes of the second proviso to Section 27 (1) and that a simple protest as registered by the party in the TR. 6 challan was enough for such purposes. He draws support to this argument from para 85 of the Supreme Court's judgment in Mafatlal Industries v. Union of India [1997 (89) E.L.T. 247 (S.C.)]. He submits that the Apex Court's decision is applicable squarely to refund claims under Section 27 of the Customs Act. Counsel submits that no interest was payable as insisted by the department as no duty of Customs was payable on the imported material under the DEEC Scheme. In this connection, Counsel relies on the Supreme Court's decision in Pratibha Processors v. Union of India [1996 (88) E.L.T. 12] and the Larger Bench decision of this Tribunal in Raymond Synthetics Ltd. v. CC, Allahabad [2000 (119) E.L.T. 205]. Drawing support from the cited case law, ld. Counsel submits that the limitation under the second proviso to Section 27(1) of the Customs Act was not applicable to the appellants' case. He prays for allowing the appeal.
(3.)Ld. JDR Sh. S.C. Pushkarna opposes the above argument on the strength of the findings of the adjudicating and first appellate authorities.