INDIA CEMENTS LTD. versus COLLECTOR OF CENTRAL EXCISE

Citation: [1989] 2 S.C.R. 715 · Decided: 25-04-1989 · Supreme Court of India · Bench: G.L. OZA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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INDIA CEMENTS LTD. 
A 
v. 
COLLECTOR OF CENTRAL EXCISE 
APRIL 25, 1989 
[G.L. OZA AND K. JAGANNATHA SHETIY, JJ.] 
B. 
I 
' 
A 
r· • 
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. 
c 
Central Excise Rules, 1944: Rule 11-Claim for refund of duty 
-')r 
paid~Letter written by assessee raising objections against levy of 
duty-Whether amounts to protest-Whether period of limitation' 
applicable. 
The appellant-Company, a manufacturer of superfine cement, D 
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 
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the claim was rejected by the Assistant Collector of Central Excise, the 
Appellate Collector and also the Appellate Tribunal on the ground of E 
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 leviable on packing charges and if the department felt it was levlaj>le 
they had no option but to suggest the rates fixed by Government fro11,1 
y 
quarter to quarter as packing charges, was not a protest to saye the f 
period oflimitation prescribed in Rule 11. 
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In the appeal before this Court, on behalf of the Company, it was 
submitted that a similar claim was allowed by the Central Governme~ 
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 G 
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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 mad~ 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 applicable but the Trade Notice of 20.1.1979 could not be 
H 
715 
716 
SUPREME COURT REPORTS 
[1989] 2 S.C.R. 
A given retrospective effect and, therefore, the matter had to be remitted 
·-t ~ 
to the Tribunal for disposal on other questions. 
B 
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 accept-
ing 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. [718-H] 
C 
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 
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cement, the cost of packing for superfine cement should not be added to 
D 
E 
the assessable value. The authorities ought to have, therefore, extended 
this view to all similar cases. [719A, DJ 
In these circumstances, the appellant is entitled to refund of the 
duty paid by it. [7!9F] 
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 
F the Appellant. 
G. Ramaswamy, Additional Solicitor General, Mrs. Indira 
Sawhney, Miss A. Subhashini and Mrs. Sushma ·Suri for the Res-
pondent. 
G 
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 
H was paid under protest whereas according to the respondent, it was not 
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INDIA CEMENTS v. COLLECTOR OF CENTRAL EXCISE [OZA, J.] 
717 
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paid under protest and therefore, the claim of refund is barred by A 
time. 
The brief facts necessary for determination are. 
The appellant-company is a manufacturer of superfine cement. B 
The company preferred the claim for refund of Rs

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