- (1.) Being aggrieved by majority decision dated 5th January, 1996 of the Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench at Madras in Appeal No. E/436/90/MAS, the original assessee has come by way of appeal under Section 35-L of Central Excises and Salt Act, 1944. By the impugned judgment and order, the assessee's claim for refund of Rs. 13,18,184.88 paid as differential duty on 6th April, 1987 in relation to period 1-3-1986 to 31-10-1986 came to be dismissed on the ground that it was paid voluntarily and suo motu and that the alleged protest was not in terms of Rule 233-B of Central Excise Rules, 1944.
(2.) Appellants manufacture "Vulcanising Solution" at their factory in Madras. On 3rd March, 1986, appellants filed the classification list under sub-heading 4006.90 carrying rate of duty at 15%. The said list was approved on 10-7-86. Appellants paid the duty at 15% accordingly from 1-3-86 onwards. However, on 28-10-86 the Assistant Collector visited the appellant's factory and directed the appellants to give a revised classification list for the aforestated product under sub-heading 4005.00 carrying the rate of 40% ad valorem and further directed the appellants to pay the differential duty for the past period i.e. 1-3-86 to 31-10-86. On 31-3-87, the Department issued a show cause notice alleging that said product was classifiable under sub-heading 4005 of Central Excise Tariff and further that exemption Notification No. 377/86 was not applicable. By the show cause notice issued by the Assistant Collector, the appellants were asked to show cause why duty for their past clearances should not be demanded at 40% ad valorem under Section 11-A of Central Excise Act, 1944. On 6-4-87 the appellants paid the differential duty of Rs. 13,18,184.88 with the endorsement on the Challan stating that it was paid under protest. Thereafter on 10-4-87 the appellants filed a letter of protest with the Assistant Collector. In the said protest letter the appellants claimed that the product was classifiable under sub-heading 4005.00 read with exemption Notification No. 377/86, dated 29-7-86 at 15%. The show cause notice resulted in the order of adjudication by the Assistant Collector dated 10-1-88 wherein he confirmed the demand only from 1-11-86 to 30-9-87 amounting to Rs. 25,61,791.72 as the appellants had paid Rs. 13,18,184.88 on 6-4-87. Being aggrieved, the appellants preferred an appeal to the Collector (Appeals). By order dated 30-6-88, the Collector (Appeals) set aside the impugned adjudication order and allowed the classification at 15% as prayed for by the appellants. After the classification dispute ended in favour of the appellants they preferred 3 refund claims for the excise duty paid and the Assistant Collector while permitting refund of the differential duty paid by the appellants in Rs. 25,61,792/- for the period 1-11-86 to 30-9-87 and further sum of Rs. 10,78,485.76 for the period 1-2-88 to 20-7-88 rejected claim for refund for Rs. 13,18,184.88 for the period 1-3-86 to 31-10-86 on the ground that duty was not paid under protest in terms of Rule 233-B of Central Excise Rules, 1944. The appeals preferred by the appellants were dismissed by the Collector (Appeals) and by the majority view of Central Excise and Gold (Control) Appellate Tribunal (in short 'CEGAT'). Hence the appellants have come by way of appeal under Section 35-L of the Central Excise Act, 1944.
(3.) Mr. Joseph Vellapally, learned Senior Counsel appearing on behalf of the appellants contended that the appellants had been paying excise duty @ 15% till 31st October, 1986 based on an approved price list. However, on a visit by the Assistant Collector on 28th October, 1986, the appellants were informed that they were required to pay excise duty @ 40% and accordingly the appellants were directed to pay the differential duty. That thereafter on 31st March, 1987 the Assistant Collector had issued a show-cause notice asking the appellants to show cause why duty @ 40% should not be demanded denying the benefit of Notification No. 377/86 for all past clearances. That consequently the assessee paid the duty amount on 6-4-87, pending conclusion of adjudication proceedings initiated vide show-cause notice dated 31st March, 1987. That the differential duty was paid accordingly on 6-4-87 amounting to Rs. 13,18,184.88 for the period 1-3-86 to 31-10-86 and while making the said payment an endorsement was made on the Challan indicating payment under protest. It was further pointed out that after making payment under protest on 6-4-87, a letter was also addressed by the appellant to the Assistant Collector in reply to the show-cause notice dated 31st March, 1987. In the said letter the appellants indicated the ground of protest. Learned counsel for the appellants contended that ultimately the appellants succeeded in their case before the Collector (Appeals) and the adjudication order was set aside and the case of the appellants that their product was subject to levy of duty @ 15% ad valorem was accepted by the appellate authority. It was argued that once the matter was resolved in favour of the appellants, their claim for refund for the period in question should have been allowed without applying the limitation of 6 months as the duty was paid under protest. It was argued that in the facts and circumstances of this case Rule 233-B was not applicable as the said Rule contemplates that where the assessee wants to pay the duty under protest, he shall deliver a letter to the competent authority giving grounds for payment of duty under protest and once the said letter was acknowledged, it constituted a proof that the assessee had paid the duty under protest. It was argued that although Rule 233-B(3) was contingent upon compliance of sub-rule (4) which requires an endorsement of duty paid under protest on copies of gate passes and RT 12 Forms, in this case, such endorsement could not have been made because the differential duty has been paid much after the clearance of the goods. It was further argued on behalf of the appellants that there was substantial compliance of Rule 233-B as the duty under protest was paid by making an endorsement on the Challan. He contended that the appellants paid duty after they were asked to do so by the Assistant Collector that goods were required to be classified otherwise than what was approved in the classification list. He, therefore, contended that the Tribunal erred in coming to the conclusion that the protest was not in terms of Rule 233-B of the Central Excise Rules.;