- (1.) We have heard Sri Bharat Ji Agrawal, the learned Senior counsel along with Sri Arvind Saran Das and Sri Shubham Agrawal, the learned counsels for the appellant and Sri R.C. Shukla, the learned counsel for the department.
(2.) The appellant is a manufacturer of fertilizer. One of its raw material is Naphtha which the appellant purchases from Indian Oil Corporation from Mathura. By means of a notification, issued under the Central Excise Act, 1944, excise duty is required to be paid at a concessional rate if Naphtha is purchased for manufacture of fertilizer. The appellant was receiving raw Naphtha at a concessional rate of duty. For the period 08.02.1998 to 11.05.1998, the jurisdictional excise authority did not allow the appellant to purchase raw Naphtha at concessional rate of duty and refused to issue a certificate in Form CT-2. The appellant protested vide letters dated 21.01.1998 and 10.02.1998 and deposited the excise duty vide challan dated 4th February, 1998 indicating that they were depositing the duty under protest. The appellant, thereafter, filed an appeal questioning the action of the department in imposing central excise duty on the purchase of Naphtha and non issuance of Form CT-2. The Tribunal, by a judgment dated 22.01.1999, held that the appellant was eligible to purchase raw Naphtha duty free. The said decision of the Tribunal became final inter se between the parties since no further appeals were filed.
(3.) The appellant, thereafter, applied for refund of the duty in terms of the second provisio to Section 11-B of the Central Excise Act, 1944 (hereinafter referred to as 'the Act') seeking refund of Rs.1,22,09,768.74. The authority rejected the claim of the appellant on the ground, that the duty was not paid under protest and that the claim application was preferred after the prescribed period of six months as envisaged under Section 11-B of the Act and, therefore, the claim was barred by time. The appellant, thereafter, preferred an appeal which was also rejected by the Commissioner (Appeals) on the ground that even though the amount was paid under protest, nonetheless, the appellant's claim was beyond the period of six months and was barred by time. The First Appellate Authority held, that the Tribunal's order dated 22.01.1999 was dictated in open Court and, therefore, the appellant was aware of the order from that date itself. The period of limitation would run from 22.01.1999 which had expired as the application was filed on 21.08.1999 after the period of six months and, therefore, the claim was barred by time. The appellant, being aggrieved, thereafter, preferred a second appeal before the Tribunal which was rejected on the ground of limitation. The Tribunal, however, came up with a new ground contending that since the appellant was a buyer, he was not entitled to apply for refund under Section 11-B of the Act. The appellant, being aggrieved, has filed the present appeal which was admitted on the following substantial questions of law:- "(1) Whether in view of the Constitution Bench decision of Hon'ble the Supreme Court of India in the case of Mafatlal Industries Limited vs. Union of India, 1997 89 ELT 247 (para 83) since the appellant was contesting the liability for payment of excise duty on the use of Naphtha by way of appeal and the appellants having been compelled to pay the duty in order to get CT-2 certificate, hence the duty shall be deemed to have been paid under protest and in view of the second provision to Section 11B the limitation of six months shall not be applicable in respect of the duty deposited by the appellant.? (2) Whether the Hon'ble CESTAT has erred in deciding the appeal on the ground that the appellant being buyer of excisable goods was not entitled to make deposit under protest, when the Commissioner (Appeals) has held that the appellant had paid the duty under protest as required under the law and the respondent has not appealed or filed across objection against the said finding of the Commissioner (Appeals)? (3) Whether the Hon'ble CESTAT has failed to appreciate that a buyer who is entitled for exemption from payment of excise duty on the goods liable to be purchased against CT-2 certificates is entitled to make protest while paying duty, in case department denies the benefit of the exemption.? (4) Whether the Hon'ble CESTAT failed to decide the question whether the period of limitation prescribed under Section 11B is applicable in the appellant's case, when it had paid the duty under protest on purchase of raw Naphtha procured by it?";