Buyer paying duty under protest

Buyer, a manufacture of Fertilizers i.e. Ammonia & Urea of naptha applied for registration under Rule 192 of the erstwhile Central Excise Rules, 1944 to procure Naptha for use in the manufacture of Fertilizers without payment of duty under notification No. 75/84-CE dated 1.3.84. The Asst. Commissioner of Central Excise rejected the application to issue CT-2 certificate for procuring duty free Raw Naptha. Buyer procured naptha on payment of duty under protest and filed appeal before the Commissioner (Appeals.) who held that the buyer are eligible to avail the benefit of exemption notification and to procure duty free Raw Naptha under CT-2 certificate under Chapter 10 procedure of the erstwhile Rules.

Refund claim of duty paid on naptha filed by the buyer was rejected on the grond that that refund is barred by limitation as refund claim is to be filed as provided under clause (B)(e) of Explanation to Section 11B of Central Excise Act, 1944 and as the buyer has not paid duty, notion of the payment of duty under protest is misplaced.

The Tribunal held that filing of appeal by the appellant has to be treated as protest, especially when there is no separate provision in the law to file protest by the buyer of the good.

The tribunal further held that the claim of the appellant for refund of excess duty paid is as a consequence of passing of the appellate order in their favour and is basically implementation of the order of the Commissioner (Appeals). The success of their appeal is not an empty formality and the appellate order is required to be implemented, as a result of which CT-2 certificate is required to be issued right from the date of their first claim and the benefit of concessional rate has to be extended from that date onwards.

The Tribunal also held that the buyer cannot be treated as purchaser as mentioned in clause (e) of Explanation (B) of Section 11B(5) of the Act but would come within the purview of Second proviso to Section 11B(1) of the Act.