RICHARDSON AND CRUDDAS LTD. Vs. CCE

JUDGEMENT

(1.) THE brief facts of the case are that, the assessees herein who are engaged in the manufacture of steel structurals also undertake the activity of reselling of used and worn out sugar mill rollers sent for reshelling by customers. The department was of the view that the activity of reshelling of sugar mill rollers was an excisable activity of manufacture of goods and, therefore, the appellants filed classification list and specifically mentioned therein that duty on reshelling rollers would be paid by them under protest in accordance with the letter dated 14.3.1975. This payment continued till 1980 when the appellants lodged claims for refund of duty paid. The details of refund claims are as under:

(2.) THE jurisdictional Asstt. Collector of Cen. Excise rejected the refund claims by order dated 11.8.1981 on the sole ground that the process amounts to manufacture and hence duty had been paid rightly and there was no question of refund of duty correctly paid. The Collector (Appeals) partly set aside the order of the Asstt. Collector accepting the contention of the assessees that reshelling of sugar mills rollers did not amount to manufacture till 2.12.1983 but would be construed as amounting to manufacture from 3.12.1983 by virtue of Notification No. 282/83 dated 3.12.1983. This was by his order dated 1.12.1984 in which he also ordered refunds if otherwise admissible. As the Order -in -Appeal was partly in favour of the assessees and partly against them, both the assessee and the Revenue filed appeals before the Tribunal which its order No. 99 to 120/85 -B.I dated 29.10.1985 took the view that reshelling of sugar mills rollers did not amount to manufacture. The Bench ordered consequential refunds, if otherwise in order. Thereafter, the appellants moved the department for sanction of refund which had earlier been rejected and by order dated 31.12.1985 (which is the adjudication order leading to the present impugned order) sanctioned claim for Rs. 14,50,056.31 in view of the Tribunal's order dated 29.10.1985, appropriated outstanding Government's dues of Rs. 9,72,019.39 payable on fabricated steel structurals falling under T.I. 68 of the schedule to the erstwhile Central Excise Tariff manufactured and cleared by the appellants during the period October, 1985 and ordered that cheque for the balance amount of Rs. 4,78,036.92 should be forwarded to them. The Revenue preferred an appeal against this order to the Collector (Appeals) on the ground that refund claims were time barred and that the amount of refund wrongly sanctioned was Rs. 13,85,740.71. The Collector (Appeals) modified the order of the Asstt. Collector by accepting the departmental appeal and held that the refund of the above mentioned amount was time barred and therefore, not payable to the respondents/assessees. It is against this order that the present appeal has been filed before us.

(3.) WE have carefully considered the rival submissions. We note that in addition to the fact that the appellants by their letter dated 14.3.1975 communicated that they would be paying duty on reshelling of sugar mill rollers under protest and indicated the same on the classification No. 1/75 dated 26.3.1975, they took up the matter further to the Tribunal, which by its order dated 29.10.1985, held that the activity of reshelling sugar mill rollers does not constitute manufacture. In this context the finding of the Apex Court in paragraph 146 of the decision in Mafatlal Industries Ltd. v. UOI becomes very relevant. The Supreme Court has held that duty paid in cases which finally ended in orders or decrees or judgments of courts, must be deemed to have been paid under protest and the procedure and limitation etc. stated in Section 11B(2) read with Section 11B(3) of the Central Excise Act 1944, will not apply to such cases. In the light of the above ratio and considering the factual position, we hold that the claims for refund are not barred by limitation and hence set aside the impugned order and allow the appeal with consequential relief due to the appellants in accordance with law.