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PETITIONER: INDIA CEMENTS LTD.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE

DATE OF JUDGMENT25/04/1989

BENCH: OZA, G.L. (J) BENCH: OZA, G.L. (J) SHETTY, K.J. (J)

CITATION:  1989 AIR 1496            1989 SCR  (2) 715  1989 SCC  (2) 676        JT 1989  Supl.    137  1989 SCALE  (1)1058  CITATOR INFO :  RF         1990 SC 977  (6)

ACT:     Central  Excises  and  Salt  Act  Rules,  1944:  Section 3--Excise duty on price of packing material used for packing superfine cement-Whether leviable--View taken by  Government in  similar case that duty was not leviable--Whether  should be extended to all similar cases.     Central Excise Rules, 1944: Rule 11--Claim for refund of duty  paid--Letter  written by assessee  raising  objections against  levy of duty--Whether amounts  to  protest--Whether period of limitation applicable.

HEADNOTE:     The  appellant-Company,  a  manufacturer  of   superfine cement,  preferred  a claim for refund of duty on  price  of packing  material of the product, paid by it during July  4, 1974  to March 1, 1974, on the ground that duty  on  packing charges on superfine cement was not leviable. But the  claim was  rejected by the Assistant Collector of Central  Excise, the  Appellate Collector and also the Appellate Tribunal  on the ground of limitation under Rule 11 of the Central Excise Rules, 1944, since the duty was not paid under protest.  The Tribunal  also held that the letter dated July 11, 1974,  in which  the appellant had stated that the duty was not  levi- able  on packing charges and if the department felt  it  was leviable  they had no option but to suggest the rates  fixed by  Government from quarter to quarter as  packing  charges, was  not  a protest to save the period  of  limitation  pre- scribed in Rule 11.     In the appeal before this Court, on behalf of the Compa- ny, it was submitted that a similar claim was allowed by the Central  Government  in the case of Birla Cement  Works  and that  the Trade Notice dated 29.10.1979 by the  Collectorate clearly stated that the cost of packing was not liable to be included in the assessable value.     While  conceding  that there was no particular  form  of protest,  it was contended on behalf of the department  that if the payments were held as made under protest, by treating the letter as a protest, then the period of limitation under Rule  11  of  the Central Excise Rules, 1944  would  not  be

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applicable but the Trade Notice of 20.1.1979 could not be 716 given retrospective effect and, therefore, the matter had to be remitted to the Tribunal for disposal on other questions. Allowing the appeal,     HELD: The letter of the appellant clearly shows that all possible contentions which could be raised against the  levy of  duty on the value of packing material were  raised,  and that the appellant was not accepting the liability,  without protest. Therefore, the letter was in the nature of protest. That being the position, the question of limitation does not arise for the refund of the duty. i718-H]     Giving the benefit without any Trade Notice in a similar case,  the  Central  Government held,  in  their  revisional order,  that as superfine cement was capable of  being  sold without  packing  like  grey portland cement,  the  cost  of packing  for  superfine cement should not be  added  to  the assessable value. The authorities ought to have,  therefore, extended this view to all similar cases. [719A, D]     In  these  circumstances, the appellant is  entitled  to refund of the duty paid by it. [719F]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  500  of 1985.     From  the  Judgment  and Order dated  25.7.1984  of  the Customs  Excise and Gold (Control) Appellate  Tribunal,  New Delhi in Appeal No. 923/81-A in Order No. 559/84-A.     Soli  J. Sorabjee, A.N. Haksar, Sanjay Grover  and  K.J. John for the Appellant.     G. Ramaswamy, Additional Solicitor General, Mrs.  Indira Sawhney,  Miss  A. Subhashini and Mrs. Sushma Suri  for  the Respondent. The Judgment of the Court was delivered by     OZA,  J. This appeal involves the determination  of  the only  question  as to whether the appellant is  entitled  to refund  of Rs.22,42,002.09 paid as excise duty on the  price of  packing  material used for packing of  superfine  cement which  according  to the appellant was  paid  under  protest whereas according to the respondent, it was not 717 paid  under  protest and therefore, the claim of  refund  is barred by time.     The brief facts necessary for determination are.     The  appellant-company  is a manufacturer  of  superfine cement.  The  company  preferred the  claim  for  refund  of Rs.22,43,002.09  alleged  to  be duty on  price  of  packing material  of the aforesaid product paid during July 4,  1974 to March 1, 1975.     This claim of refund was rejected by Assistant Collector of Central Excise Tirunelveli on the ground that Rule 11  of the Central Excise Rules 1944 was applicable as duty was not paid  under  protest and the claim was barred  by  time.  On appeal, the Appellate Collector of Custom and Central Excise by the judgment dated February 7, 1981 maintained the  order passed  by  the Assistant Collector on the  same  ground  of limitation,  as the merits of the claim was not disputed  by the  department. This is clear from the  following  observa- tions in the Appellate Collector’s order:               "They  based their claim on the  Trade  Notice               No. 232/79 dated 29.10.79 of Madras Collector-               ate declaring that the said cement is not  the               variety of cement requiting packing to prevent

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             deterioration, and the cost of packing of such               cement  is  not liable to be included  in  the               assessable  value.  The ground  on  which  the               claim  was made are not disputed in  this  ap-               peal."                   Thereafter,  the  appellant  unsuccessful-               ly   approached  the Customs, Excise and  Gold               (Control)   Appellate  Tribunal.  Before   the               Tribunal also, only the question of limitation               was put against the appellant. The Tribunal by               its order dated July 25, 1984 has stated:               "Before  us, the only question argued was  the               question of limitation. It was urged that  the               letter dated 11.6.74 amounted to a protest  so               that  the period of limitation  prescribed  in               Rule 11 of the Rules ceased to be applicable."      The  Tribunal also took the view that the letter  dated June 11, 1974 was not a protest to save the period of  limi- tation.      Hence this appeal. 718     We  heard  learned  counsel for parties. It  is  not  in dispute  that the duty was paid for the period from July  4, 1974  to  March 1, 1975. If it was paid under  protest,  the orders of the authorities cannot be sustained. It is, there- fore, necessary to refer to the contents of the letter dated June 11, 1974. The letter raised many objections against the levy  of  packing charges. It was stated that  the  duty  on packing  charges on superfine cement was not  leviable.  The appellant finally said:               "If  the  department feels that  the  duty  is               leviable  on packing charges, we have  no  op-               tion,  but to suggest the rates fixed  by  the               Government  of India from quarter to  quarter,               as packing charges."     The  counsel  also referred to us the  decision  of  the Central Government in the case of Birla Cement Works where a similar claim was allowed by order dated December 31,  1980. Counsel further referred to us the Trade Notice dated  Octo- ber  29, 1979 issued by the Collectorate, Madras wherein  it was  clearly  indicated that the costs of  packing  was  not liable to be included in the assessable value.     Learned  Additional Solicitor General  frankly  conceded that  at  the material time, there was  no  particular  form prescribed  for protesting against the levy or paying  under protest. He also contended that if the letter is treated  as a  protest  and the payments are held to be  payments  under protest then the limitation prescribed under Rule 11  admit- tedly  would not be applicable, but the Trade Notice  issued by the Madras Collectorate on October 29, 1979 could not  be given retrospective effect and, therefore, the matter should go back to the Tribunal for disposal on other questions.     We gave our anxious considerations to the rival  submis- sions.  A perusal of the letter dated June 11, 1974  clearly shows  that all possible contentions which could  be  raised against  the levy of duty on the value of  packing  material were  raised. If this could not be said to be a protest  one fails  to  understand  what else it could be.  It  does  not require much time to analyse the contents of the letter.  An ordinary  reading with common sense will reveal  to  anybody that  the appellant was not accepting the liability  without protest.  We have no hesitation to hold that the letter  was in  the  nature  of protest. That being  the  position,  the question  of  limitation does not arise for  refund  of  the duty.

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719     It  is rather strange that learned Additional  Solicitor General  wants  the matter to go back to  the  Tribunal  for considering the effect of Trade Notice. The Central  Govern- ment  in their revisional order dated December 31,  1980  in the case of Birla Cement Works gave the benefit without  any Trade Notice. There it was observed:               "In the circumstances Government accepted  the               petitioner’s pleas and observe that  superfine               cement is nothing other than ordinary portland               which  is grounded to a very high fineness  of               not  less  than  3500 CM 2/gm  and  that  this               higher fineness does not lead’ to its deterio-               ration without packing. The Government, there-               fore, accept the contention of the petitioners               and hold that the impugned good being  capable               of  being sold without packing  like  ordinary               gray  portland cement the cost of packing  for               superfine  cement should not be added  to  the               assessable value."     The authorities ought to have extended the view taken by the Central Government in the case of Birla Cement Works  to all similar cases. Moreover, the Appellate Collector and the Tribunal  clearly  stated that the  only  question  agitated before  them was the question of limitation. The order  does not  indicate  that the counsel for the  Department  or  the departmental  representative  raised any other  question  on merits.  Indeed no objection could have been raised  on  the merits  of  the matter in view of the order of  the  Central Government in the Birla Cement Works.     In  these  circumstances,  the appeal  is  allowed,  the orders passed by the Tribunal and Other authorities are  set aside.  It  is declared that the appellant  is  entitled  to refund  of the amount. The appellant shall be paid  interest at  the  rate of six per cent from the date  of  refusal  of refund with costs of this appeal quantified at Rs. 10,000. N.P.V.                                          Appeal   al- lowed. 720