Excise duty paid under protest on behest of audit objection, is eligible for refund

While setting aside the impugned order issued by the authority, the Ahmedabad Bench of Customs, Excise & Service Tax Appellate Tribunal directed for excise duty refund to Indian Oil Corporation Ltd. (IOCL) paid under protest.

“Merely by filing the appeal, the appellant’s refund cannot be withheld which has been clarified by the Central Board of Excise Customs in various circulars from time to time, that unless until stay is obtained from the Higher Court the refund cannot be kept pending”, added the CESTAT Bench.

A Division Bench of Justice Ramesh Nair and Justice Raju observed that “the appellant had paid the duty on the behest of the audit objection which itself is a payment of duty under protest. Moreover, the appellant has also clearly mentioned in their TR-6 challan that the payment of duty is under protest. The appellant has also submitted a letter declaring that such payment of duty is under protest. In this position limitation provided under section 11B is not applicable for refunding the Excise Duty.”

Advocate Sachin Chitnis appeared for the Petitioner and Advocate R.K. Agarwal appeared for the Respondent. 

The brief facts of the case were that in respect of warehouse goods, the appellant was collecting an amount under the head of other charges on which excise duty was not paid. The department’s contention was that the duty on such other charges is required to be paid. On the basis of the audit, the appellant paid an amount of Rs. 93,36,942/-vide TR-6 challan “under protest” and informed the department The sanctioning authority rejected the refund claim based on the ground that the refund had been filed on 18.09.2012 and refund claim of duty paid on 30.03.2006 i.e. after more than 6 years.

After considering the submission, the Bench noted that the appellant had paid the duty on the behest of the audit objection which itself is a payment of duty under protest.

The Bench stated that the contention in orders of lower authorities that the department has filed an appeal before the Supreme Court against the Tribunal order, whereby the Tribunal held that the duty paid on other charges, which is related to local Sales Tax is not payable.

Hence, the Bench directed to refund the claim filed by the appellant by setting aside the impugned order issued by the Authority. 

Cause Title: Indian Oil Corporation Ltd Vs. C.C.E. & S.T.-Surat [Excise Appeal No. 11891 of 2016-DB / 2023-Enterslice-10-CESTAT-Ahmedabad]

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Indian-Oil-Corporation-Ltd.-Versus-C.C.E