JUDGMENT
S.L. Peeran , J.
1. By this appeal the appellant is challenging the correctness of the Order-in-Appeal No. 4/2000 (M-I) dated 18.1.2000 by which he has upheld the order of the Assistant Commissioner (C-Division) holding that there has been an erroneous refund sanctioned to the appellant in terms of Section 11A of the Central Excise Act.
2. The brief facts of the case are that an Order-in-Original No. 20/97 dated 25.2.97 had been confirmed against the appellant. They had filed an appeal before Commissioner (Appeals) against the said Order in Appeal Nos. A/188/97 dated 10.11.97 and A/97 dated 20.7.97. When the appeal was still pending before Commissioner (Appeals) the Superintendent of Central Excise, Range C-V Division wrote a letter dated 16.3.98 and referred to Order-in-Original No. 39/97 dated 12.5.97 passed by the ACC of erstwhile Chennai VII Division and demanded the amount confirmed thereunder. He demanded the amounts immediately as there was no stay order for recovery from Commissioner (Appeals) in the pending appeal of the appellant. In view of this letter, demanding the amount the appellant deposited a sum of Rs. 4,93,300 by RG 23 Part-II Register SI. Nos. 2068 & 2069 dated 16.3.98 and wrote in the register against these entries “Amount paid on protest under Rule 233B as pre-deposit vide your OC No. 336/98 dated 16.3.98. Amount paid on protest under Rule 233B as pre-deposit vide your O.C No. 336/98 dated 16.3.98”. The appeal before the Commissioner (Appeals) had been allowed in favour of the party and, therefore, they wrote a letter to the Assistant Commissioner to refund the amount which had been deposited after the passing of the Order-in -Original when their appeal was still pending before the Commissioner (Appeals). The Superintendent vide his letter dated 18.1.99 informed them that the Assistant Commissioner is pleased to grant refund amounting to Rs. 1,94,663. The letter stated that the said amount may be taken credit in RG 23A Part-II and compliance reported. The party in terms of the direction given took the credit in RG 23 A Part-II SI. No. 2069. The department after lapse of time issued show cause notice dated 12.7.99 stating that there was an erroneous refund on the ground that the appellant have not complied with the terms of Rule 233B and, therefore, the protest was not in order. It was stated that there should have been a letter of protest before making the payment and in the present case the letter of protest was sent on 31.3.98 after payment of duty done earlier on 16.3.98 and that there was no compliance of Rule 233B. As there was no protest therefore refund made by the department was an erroneous refund, hence they should make the payment as per the demands.
The appellant sent a detailed reply to the show cause notice stating that the refund was in terms of Section 11B (3) of the Act as a consequence of their succeeding in their appeal. They also contended that the duty has been paid under protest and they had protested for paying the said demand and noted “under protest” in the RG23A Part-II register. They also relied on large number of judgments to support their plea that refund was done as a consequence of their succeeding before Commissioner (Appeals) and that it was not hit by time bar. Therefore they stated that the refund was in order and not an erroneous refund. Besides they contended that the protest made by them was in order and the requirement of Rule 233B was not attractive in their case as the duty was debited on demand issued by Superintendent’s letter, while their appeals were still pending. The Commissioner (Appeals) in the impugned order has noted about the entries made in the RG23A Part-II. However, he has noted that Rule 233B has not been followed and, therefore, the protest cannot be accepted. As a result the refund made by the department was erroneous. He has not referred to various contentions raised by the appellant including the fact that notwithstanding the fact that payment wad made under protest but it was as a consequence of letter of the Superintendent demanding the amount. The refund was also as a consequence of their succeeding in the appeal before the Commissioner, which is not hit by time bar.
3. Ld. Consultant Shri V.S. Venugopalan relied on the judgment of the Apex Court rendered in the case of Mafatlal Industries Ltd. v. UOI, 2002 (83) ECC 85 (SC) : 1997 (89) ELT 247 (SC) and referred to para 107 of the Apex Court’s order which clearly laid down that the pre-requisite for invoking Section 11B(2) for filing application for refund within 6 months from the date of payment cannot be complied with in respect of pending decrees and orders. The Apex Court laid down that when the assessee was protesting against the recovery of the excise duty from him for which he had even initiated legal proceedings then in that even it should be therefore in order to assume that he had paid the duty even though he was protesting its recovery. The Apex Court held that to ensure that such orders and decrees are not frustrated, it must be deemed that the duties of excise in such cases were paid ‘under protest’ within the meaning of the second proviso to Clause (1) of Section 11B. He contended that this citation had been followed by the Hon’ble Gujarat High Court in the case of Shree Ram Food Industries v. Union of India, 2003 (152) ELT 285 wherein the High Court has clearly noted a similar instance of payment made under protest when the matter was still pending in litigation. The High Court after due application of the Apex Court judgment noted above held the deposits having been made under threat by Deputy Commissioner and Superintendent and not a voluntary payment has to be treated as payment under protest. He also referred to the judgment rendered in the case of India Cements Ltd. v. Collector, 1989 (22) ECC 284 (SC) : 1989 (41) ELT 358 wherein the Apex Court has held that a letter of protest is to be treated as sufficient to conclude the compliance of requirement of filing a letter of protest. He contended that this judgment was relied on in the case of Shree Baidyanath Ayurved Bhawan Ltd. v. CCE, 2990 (48) ELT 606, He also relied on the judgment rendered in the case of ICEM Engineering Co. P. Ltd. v. CCE, 1989 (44) ELT 744 wherein the letter of protest was found to be sufficient. He also contended that even the Apex Court in the case of Mafatlal Industries in paras 84 & 85 the Hon’ble Court accepted the letter of protest to be sufficient compliance of Rule 233B and there was no reference to other Sub-Rules of Rule 233B. He also relied on the judgment of the Tribunal in the case of Modern Woollen Mills (P) Ltd. v. CCE, 1999 (84) ECR 744 wherein the Tribunal held that a receipt of letter indicating payment of duty under protest which was not disputed by the department and were considered as “proper protest” and does not effect the time bar prescribed under Section 11B of the Act. Likewise reference was made to the Tribunal’s judgment rendered in the case of Meghdev Enterprises v. CCE, 2002 (143) ELT 627. Further reference was made to Mahalaxmi Fabrics Mills Ltd. v. CCE, 2002 (100) ECR 407 wherein also it was held that duty debited under protest is also a compliance of law although non-filing of formal protest letter under Rule 233B could not disentitle to the respondent for refund. Reference was made to Bhanu Chemicals Pvt. v. CCE, 2001 (97) ECR 99 wherein the Tribunal noted that when the modvat credit was disallowed by the original authority and amounts debited under protest in RG 23A Part-n pending decision of the appellate authority that was to be considered as protest under Rule 233B and the Tribunal held that the claim cannot be rejected as time barred. Reference was made to STI Sanoh India Ltd. v. CCE, 2001 (127) ELT 572 wherein the Tribunal held that letter of protest delivered to proper officer after payment of duty instead of prior to payment of duty and entries as protest on documents was a sufficient compliance and the claim was not time barred. In the case of Samurai Electronics Pvt. Ltd. v. CCE, 1998 (97) ELT 85 the Tribunal held that the payment of duty made in terms of adjudication order under protest is deemed to be payment made under protest and hence refund claim is protected by limitation. In the case of Mahalakshmi Industries v. CCE, 1995 (80) ELT 352 the party had lodged a protest and deposited the amount by endorsing the words “under protest” on RT 12 Returns. They have not followed the procedure under Rule 233B and the Department had been intimated by the appellant about their intention to pay duty under protest.
Therefore, the Tribunal after applying the ratio of the several judgments including the Apex Court judgment rendered in the case of Collector v. Calcutta Steel Industries, 1989 (39) ELT 175 and that of Bombay High Court in the case of Roche Products Ltd. v. UOI, 1991 (51) ELT 238 including the judgment of the Apex Court rendered in the case of India Cements Ltd. v. Collector, 1989 (22) ECC 284 (SC) : 1989 (41) ELT 358 (SC) upheld the appellant’s claim and held that the refund claim was not barred by time. In the case of CCE v. Enzo Chem Laboratories P. Ltd., 1996 (83) ELT 434 the deposits had been made under protest and appeal filed against the confirmation of demands before the appellate authority, the Tribunal held that such deposits were to be considered as under protest. In the case of General Engg. Works v. CCE, 1999 (65) ECC 89 (T): 1999 (111) ELT 86 (T) the Tribunal held that time limit under Section 11B of CE Act is not applicable when the matter was pending before the Appellate Forum and in pursuance of that order the party has filed the refund claim. Ld. Consultant submits that the very Commissioner (Appeals) has subsequently followed the Apex Court judgment rendered in the case of Mafatlal Industries and has granted refund claim holding that the refund had been made as a consequential benefit accrued on the appellant which should have been given to the appellant without a murmur. He had noted that para 146 of Mafatlal’s judgment would apply and not para 83. He has given this order in Order-in-Appeal No. 61/2000 (M-III) dated 31.3.2000 in RE: Consul Consolidated P. Ltd. 2000 (121) ELT 565, Consultant submits that this judgment rendered by the very Commissioner was contra to the order given in the impugned order. He submits that it is very clear that there was no erroneous refund and hence the impugned order is required to be set aside and the appeal be allowed.
4. DR Shri C. Mani reiterated the grounds taken in the show cause notice by the department and the findings recorded by the authorities. He submitted that there was no proper compliance of Rule 233B and relied on the Tribunal’s judgment rendered in the case of Shree Shyam Filaments Ltd. v. CCE, 2002 (81) ECC 567(T) : 2002 (103) ECR 343 and that of Shree Transformers v. CCE, 2002 (142) ELT 120.
5. I have carefully considered the submissions made by both the sides. The facts clearly reveal that the appellant had deposited the amount as a result of the Order-in-Original passed against them and after a letter received by them from the Superintendent directing them to deposit the amount as there was no stay order from the appellate Commissioner. The appellant as a consequence of the pressure complied with the Department’s letter and paid the amount by protest and noted about the protest in RG 23A Part-II register. They sent a letter dated 31st March, 1998 intimating about the deposit while their appeal was pending before the Commissioner (Appeals). The appeal before the Commissioner was decided in their favour and hence they asked the amount to be refunded. The Superintendent vide his letter dated 18.1.99 granted the refund and directed them to credit in RG 23A Part-II and report compliance. They had done so by taking credit in RG 23A Part-II SI. No. 2069. Thereafter show cause notice was issued alleging that the refund made was erroneous and hence they should deposit the amount. The Commissioner (Appeals) did not apply his mind on the aspect of the pendency of the appeal before Commissioner (Appeals) and the payment being made in terms of Order-in-original and letter issued by the Superintendent. The Apex Court in Mafatlal Industries case has clearly laid down in para 107 that such payment as a consequence of legal proceedings and protesting against the recovery of the excise duty from them for which they had even initiated legal proceedings; that Apex Court held that it may be deemed that the duty of excise in such cases were paid under protest. Section 11B (3) also clearly lays down the provisions of refund as a consequence of any order or decree of a Court or Tribunal. Even without going into the question of appellant having followed various procedures laid down under Rule 233B still on this count the appellant succeeds and in this regard they are strengthened by the Apex Court judgments. This has been followed by the very Commissioner in passing the order in RE; Consul Consolidated P. Ltd., 2000 (121) ELT 565. The Tribunal also in the case of General Engg. Works v. CCE (supra) clearly held that time limit under Section 11B of CE Act is not applicable when the matter was pending before the Appellate Forum and in pursuance of that order the party has filed the refund claim. I find the judgment of the Gujarat High Court in the case of Shree Ram Food Industries v. UOI (supra) also clearly applies to the facts of the case. Likewise, the judgment rendered by the Tribunal in the case of STI Sanoh India Ltd. v. CCE (supra) is on the same point and applies in all force. All other citations referred to by the consultant also applies to the facts of the case. There was clear protest by deposit made in RG 23A Part-II and such protest has to be held as a “proper protest”, although letter was given subsequently. The rulings cited by DR is clearly distinguishable. In Shree Shyam Filaments Ltd. v. CCE, 2002 (81) ECC 567 (T) : 2002 (103) ECR 343 the appellants had not deposited the amount during the pendency of the legal proceedings, under protest and, therefore, the facts are clearly distinguishable. Likewise the judgment of Shree Transformers v. CCE, 2002 (142) ELT 120 is distinguishable as the deposits were not made in pendency of any legal proceedings. Therefore the citations relied by the DR is clearly distinguishable. In view of plethora of judgments and the matter being covered by the Apex Court and refund made in accordance with the provisions of Section 11B (3) of the CE Act, therefore, the refund made by the department as a consequence of the appellant succeeding before the Commissioner (Appeals) is a proper refund order and not an erroneous refund. Even otherwise the protest made by the appellant in depositing the amount and the deposit having been made under pressure has been held by in the cited judgments to be a proper protest. Therefore, on both these counts the appellant succeeds. I therefore set aside the impugned order and allow the appeal.