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Pure Drinks (New Delhi) Ltd., Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1987)(31)ELT138TriDel
AppellantPure Drinks (New Delhi) Ltd.,
RespondentCollector of Central Excise
Excerpt:
1. as the issue involved in the two appeals, originally preferred as revision applications before the central government, is identical and flow from a common order-in-appeal dated 24-3-1977 passed by the appellate collector of central excise, new delhi, the same were taken up for hearing and disposal together. the case of the appellants as set out at length by their advocate shri bedi is as follows : 2. the appellants are engaged in the manufacture of aerated waters and at the relevant time had two such units, one at connaught lane and the other at najafgarh road. the aerated waters were brought under the central excise tariff w.e.f. 1-3-1970 (item 1-d get). the rate of duty was on ad valorem basis. the appellants wrote a letter dated 1-3-70 addressed to the superintendent, central.....
Judgment:
1. As the issue involved in the two appeals, originally preferred as revision applications before the Central Government, is identical and flow from a common order-in-appeal dated 24-3-1977 passed by the Appellate Collector of Central Excise, New Delhi, the same were taken up for hearing and disposal together. The case of the appellants as set out at length by their advocate Shri Bedi is as follows : 2. The appellants are engaged in the manufacture of aerated waters and at the relevant time had two such units, one at Connaught Lane and the other at Najafgarh Road. The aerated waters were brought under the Central Excise Tariff w.e.f. 1-3-1970 (Item 1-D GET). The rate of duty was on ad valorem basis. The appellants wrote a letter dated 1-3-70 addressed to the Superintendent, Central Excise, MOR HI stating as under : "Kindly approve the following wholesale prices of our aerated water as shown below :-Coca-Cola Rs. 7/-per crate.Soda Rs. 21- per crate.Fanta Rs. 7/- per crate." The Superintendent made the following endorsement dated 5-3-1970 on the body of the said letter from the appellants.

At the same time, the appellants were orally asked to give to the Superintendent information on the price structure as it prevailed prior to the levy of duty on aerated waters. Vide their letter dated 2-3-1970, addressed to the Superintendent, the appellants furnished their price structure as it was previous to the levy and as it was modified after the levy of excise duty. Shri Bedi laid stress on the fact that in this letter the appellants had given a clear indication that the price was inclusive of excise duty and distribution charges.

In another letter dated 6-3-1970, written in continuation to their earlier letter dated 2-3-1970, the appellants explained that they were charging freight at 30 paise per crate for carting their goods to the retailers in Delhi and 70 paise per crate for carting the same to outstations like Karnal, Kurukshetra, Yamunanagar etc. In their letter dated 7-3-1970, the appellants clarified their sales structure further by indicating that the wholesale prices indicated in their letter dated 1-3-1970 were inclusive of distribution charges. The appellants made a specific reference to the prevalent sale pattern in the following words :- "We may, however, mention in this connection that this arrangement may also be considered as provisional subject to the clarification as to whether excise duty Should or should not be charged on the expenses incurred towards our distribution charges." This letter was followed by another letter dated 10-3-1970, wherein it was again stressed that /their wholesale prices for the various brands of aerated water manufactured by them were inclusive of distribution charges. In the said letter a specific clarification was sought from the department as to whether the excise duty should or should not be charged on the expenses incurred towards their distribution charges. In a communication captioned "Appealable Order" dated 31-3-1970, the Superintendent of Central Excise referred to the abovementioned correspondence and pointed out that the only deduction from the selling price for assessment purposes available to the appellants was the excise duty. It was also pointed out that 'distribution charges' whether for Delhi or for outstations were not deductions permissible in their case. Shri Bedi, the learned advocate for the appellants drew our pointed attention to the fact that the appellants were specifically told in the body of this "Appealable Order' that "Representation against this order lies to the Assistant Collector of Central Excise, MOD, New Delhi." Against the Superintendent's 'Appealable Order' dated 31-3-1970, the appellants represented to the Asstt. Collector vide their letter dated 21-5-1970 wherein they reiterated their earlier stand that they were entitled to deduct the average freight at the averaged rate of 30 paise per crate for deliveries effected in Delhi and 70 paise for out-station deliveries. While this correspondence between the appellants and the lower authorities was in progress, the appellants were asked to file price-list under Rule 173-C. Shri Bedi invited our attention to the price-list dated 17-3-1970, effective from 1-3-1970, filed by them in respect of their products Coca-Cola, Fanta Orange and Soda Special. The Superintendent, Central Excise, made the following remark with regard to the column "ex-factory wholesale price exclusive of duty." "The following rates are approved with effect from 1-3-1970 as assessable value pending verification of invoices." Shri Bedi submitted that till-date, the appellants had not received any reply to their representation dated 21-5-1970 addressed to the Assistant Collector and that they were awaiting the result of their representation. Shri Bedi emphasized that it was open to an assessee/appellant to send further reminders or not. Once a representation had been made, it was incumbent on the Department to dispose of the representation one way or the other. So long as no justification was given for a particular decision, the appellants were entitled to presume that the subject matter of the representation was still under consideration and that the fact that further reminders were not sent by the appellants could not be deemed to be held against them and stand taken that the appellants had accepted the position and given up their legal right. Tracing the course of events further, Shri Bedi stated that the scope of Section 4 of the Central Excises & Salt Act, 1944 was decided by the Supreme Court in their judgment given in A.K.Roy v. Voltas Ltd. 1977 ELT 177 (SC), The crux of the Supreme Court judgment was that duty of Excise was leviable only on the value determined by manufacturing cost and manufacturing profits. No other additions could be loaded on to this value for levy of excise duty.

When the appellants became aware of this enunciation of legal position by the highest Court of the land, they filed five refund claims for five different periods as indicated below :SI. Period to which the Amount of theNo. refund claim relates refund claim5.

1-11-73 to 25-09-74 Rs. 5,12,236.88Najafgarh Road Plant.SI. Period to which the Amount of the refund claim Amount of revisedNo. refund claim relates originally filed refund claim5.

1-11-73 to 25-09-74 Rs. 6,99,629.66 Rs. 8,44,252.32 Rs. 2,98,651.65 Rs. 3,57,460.83 These refund claims preferred by the appellants were rejected by the Assistant Collector as time barred under Rule 11 of the Central Excise Rules, 1944. Besides rejecting the claims on the question of limitation, the Assistant Collector also rejected the same on merits on the ground that the pattern of sale had an inbuilt element of equalised freight which was not a permissible deduction. Dissatisfied, with the Assistant Collector's order, the appellants preferred two separate appeals before the Appellate Collector of Central Excise, New Delhi.

The said Collector disposed of the two appeals by a composite order dated 24-3-1977. The Appellate Collector did not agree with the contention raised before him by the appellants that their letters dated 7-3-1970 and 10-3-1970 addressed to the Superintendent amounted to protest in the absence of a final decision on their representation dated 21-5-1970 and that the Assistant Collector was wrong in rejecting the appellants' claims as barred by limitation. Following this line of reasoning, the Appellate Collector further held that in the absence of a protest, the appellants could not take shelter of a period of three years with reference to the date of discovery of a mistake of law in the light of the Supreme Court's judgment in the Voltas Ltd. case. On merits also, the Appellate Collector rejected the appellants' case.

However, the Appellate Collector took a somewhat different view from the Assistant Collector's view in rejecting the appellants' claim on merits. He held that the invoices issued during the relevant period did not show separately the transport expenses or other charges which were being claimed as deductions from the price. The Appellate Collector observed that it was for the first time that the appellants had raised the question of deduction of distribution charges from the selling price at the appeal stage. Accordingly, apart from this finding, the Appellate Collector also held that distribution charges could not be considered as post-manufacturing expenses and treated as permissible deductions in the light of the Voltas judgment. It is against the impugned order of the Appellate Collector that the appellants first preferred revision applications before the Central Government which, as stated earlier, have been transferred to this Tribunal and are being treated as appeals.

3. Shri Bedi gave a split up of the refund claims pertaining to the two appeals, namely,5.

1-11-73 to 25-09-74 Rs. 5,12,236.88Najafgarh Road Plant.

Shri Bedi stated that besides the 10 refund claims as set out above which are the subject of the present two appeals 'before us, there were two other refund claims, particulars of which are' given below : He submitted that interestingly enough the claim for the period 17-9-74 to 25-9-74 was allowed by the Appellate Collector and for the refund claim pertaining to the period 1-7-74 to 16-9-74, the Appellate Collector had remanded the matter to the lower authority holding that in view of the representation dated 21-5-70, the claim could not be treated as barred by limitation and required to be examined on merits.

Shri Bedi pointed out that the Appellate Collector's order granting relief to the appellants with regard to the period from 1-7-74 to 16-9-74 had been reviewed by the Central Government under Section 36 of the Central Excises & Salt Act, 1944 (hereinafter to be referred to as Act), as it stood at the relevant time. After examining the matter, the Government of India vide Order-in-Review No. 360 of 1980, dated 31-3-1980 upheld the finding of the Appellate Collector that the claim was not barred by limitation. To complete the sequence of events, Shri Bedi pointed out that there were two remaining refund claims filed by the appellants, namely, for the periods 1-7-74 to 16-9-74 and 17-9-74 to 25-9-74. Both these claims have not yet been finalised by the lower authorities. Shri Bedi submitted that right from 1-3-70, the date on which duty was imposed on aerated waters, the appellants had specifically brought it to the notice of the lower authorities that distribution charges of 30 paise and 70 paise per crate for Delhi and put-stations, respectively, were entitled for exclusion from the selling price. They had taken this stand even before the judgment in the Voltas case Was pronounced. Further, the appellants had made It clear that distribution charges could hot be treated as a part of the assessable value and that they were paying duty under protest. The lower authorities on their part, had treated, initially at least, the inclusion of distribution charges as a provisional element subject to verification. Neither the Central Excises & Salt Act, 19H nor the Rules had any provision as to the manner in which a protest had to be lodged and, therefore, the concept had to be interpreted in the ordinary course of understanding. The language of the appellants' letters dated 7-3-1970, 10-3-1970 and 21-5-1970 was absolutely unambiguous in its meaning and content. No doubt was left, so far as the intentions of the appellants were concerned, that they were not satisfied with the distribution charges being treated as a part of the assessable value.

They had left no doubt on this score vide their representation dated 21-5-70 addressed to the Assistant Collector. On the other hand, the lower authorities never disclosed their decision on the appellants' representation dated 21-5-1970. This showed a lack of proper appreciation of how the sequence of events took place. There had thus been a clear denial of natural justice to the appellants. Shri Bedi emphasized that the Government of India in parallel proceedings, flowing from another Appellate order, had accepted the appellants' plea that their representation dated 21-5-70 was a 'protest' and hence ground of limitation was not legally adopted in dealing with the refund claims of the appellants. Shri Bedi pleaded that the Central Government's orders were squarely applicable to the present case - the goods were the same, the appellants were the same and legal issue raised there was also the same.

4. Coming to the merits, Shri Bedi submitted that the Assistant Collector as well as the Appellate Collector had rejected the claims holding the charge of 30 paise per crate and 70 paise per crate being in the nature of equalised freight and hence not entitled for deduction in arriving at the assessable value of the goods. Shri Bedi submitted that the Supreme Court in their judgment 1983 ELT 1896 (SC) (Union of India and Ors. v. Bombay Tyre International etc. etc.) had given a clear finding that-the element of freight, when averaged or equalised, is a permissible deduction while working out the assessable value of the goods. Shri Bedi, therefore, submitted that (a) by virtue of lodging their protest, the appellants had removed the hurdle of limitation in their case; and (b) they were clearly entitled to exclusion of distribution charges as these were nothing but equalised or averaged freight. He prayed that the appeals should be remanded to the Collector (Appeals) for a discussion on merits in accordance with the law as laid down by the Supreme Court.

5. Shri A.K. Jain, the learned SDR refuted the various contentions of Shri- Bedi. With regard to 'the limitation, the thrust of his argument was that Rule 11 was relevant to the appellants' case. It was not the appellants' case however, that duty was paid by them either through inadvertence or error. As this was not a case of inadvertence or error, the refund claims made by the appellants were hit by limitation set out under Rule 11. Referring to the submission made by Shri Bedi that it was a case of mis-construction of law, Shri Jain submitted that a misconstruction of law is different from a mistake of law. In this connection, he referred to M/s. Dalmia Dairy Industries Ltd. case (Appeal No. 374/ 81-C - Order No. 250/8M2) where a distinction between the two legal concepts has been made. Shri Jain also invited our attention to the judgment dated 8-1-1970 of the High Court of Mysore at Bangalore in, Writ Petitions No. 1730/67 (M/s. Gowrishankar Silk Wvg.

Factory, Bangalore v. CCE, Bangalore) and No. 1731/67 (M/s. H.G.Chandrashekhar Silk Wvg. and Twisting Factory, Bangalore v. CCE, Bangalore). He submitted that the Hon'ble High Court had held that no provision existed under the Act or Rules for making refund by the authorities except under Rule II and that 'if the case of the petitioners was that the duty was not paid through inadvertence, error or mis-conceptions, the remedy open to them was through a court of law and not by application to the competent Central Excise authorities.

Attacking the appellants' case from another angle, Shri Jain submitted that the appellants' letter dated 21-5-70 was merely a narration of facts. It neither sought any clarification nor embodied any protest.

What was more relevant in this context was the fact that no follow up action was taken by the appellants on this letter. According to him the appellants were trying to take undue advantage of their letter dated 21-5-70 and elevating it to the status of a protest letter which in fact it was not. Further, referring to Shri Bedi's contention that the appellants had made a representation to the Assistant Collector as advised by the Superintendent, it was stated that at the relevant time, an appeal against Superintendent's order lay to the Deputy Collector.

Therefore, any representation made to the Assistant Collector could not be treated as an appeal. Shri Jain submitted that to draw any relief from the Supreme Court's judgment 1983 ELT 1896 (SC) the appellants had first to cross the hurdle of limitation which they were not in a position to do in law. Referring to the Government of India's decision in Order No. 360 of 1980, dated 31-3-1980, Shri Jain submitted that the Tribunal was not bound by any judgment of the Central Government and he requested that this Tribunal should come to an independent decision in the light of his submissions.

6. Since the matters had been decided by the lower authorities on the basis that the claims were barred by limitation, we did not hear detailed arguments on the merits of inclusion of the so-called distribution charges in the assessable value, and reserved our decision on the question of limitation after it had been extensively argued. The basis of the appellants' case on limitation is that they had recorded a protest at the appropriate time in the form of a representation to the Assistant Collector, as advised in the Superintendent's "appealable order". Therefore, according to the appellants, all their claims were within time and entitled to be disposed of on merits and in accordance with law, taking into account the latest pronouncements of the Supreme Court.

7. As regards the appellants' argument that payment of duty had been under protest, we have taken note of earlier decisions of the Tribunal where also it was held that payment was under protest and it was held that the respective claims were not barred by limitation. One such decision was that in Appeal No. ED(SB)(T)514/82-A, decided on 9-8-1983 (Collector of Central Excise v. Chennai Bottling Co. Ltd., Madras) 1985 (19) ELT 129. Briefly, the facts of the case were that the appellants had, while paying the duty, simultaneously written letters to the lower authorities in which they had stated that they were not satisfied with the classification adopted by the lower authorities. While disposing of the appeal, the Bench had held that contents of the letter (written on the lines in the present appeals) were clearly in the nature of a protest and, therefore, the bar of limitation could not be resorted to by the Department. The following observations from the above order are relevant : "We agree with Shri Sarvanai that letter dated 14-3-1973 sent by the respondents to the Excise authorities was clearly to safeguard their interest by way of a protest with regard to the classification aspect in this case. The language of the letter and its contents are absolutely clear and do not admit of any ambiguity with regard to their legal content or meaning."(Tribunal) (Indian Tool Manufacturers, Bombay v. Collector of Central Excise, Bombay), the issue of payment under protest came up for consideration along with other issues. It was held in that case that as duty had been paid under protest the claim must be considered in time and the price-lists accepted, nor could it be considered that the ascessees should have sought provisional assessment as the Department had already decided that the prices were not acceptable. The material portion from that judgment is extracted below : "When the Department had specifically refused to approve the prices as claimed by the appellants, they could not have suspended their clearances until the matter was finally settled in their favour (which took nearly 16 months). They clearly stated that they were paying duty under protest. Therefore, their claim for assessment on the prices claimed by them must be taken as having been made in time and kept alive. It is not material that they did not ask for provisional assessment." These two cases also have many features in common with the above-mentioned case. For example, the price-list filed by the appellants had been approved provisionally. The appellants had clearly written to the Department stating that the valuation should be treated as provisional and they could not have obviously stopped their production and clearances till the disposal of their representation by the Assistant Collector. Once a protest is made within the limitation period then the claims flowing qua that protest must be deemed alive till they are disposed of through adjudication proceedings. We accept the appellants' contention that their protest had not been disposed of till the dates they filed their refund claims. We do not agree with the learned SDR that the appellants should have gone on writing further letters when no decision was passed by the Assistant Collector on their letter of 21-5-1970. On the other hand, there is force in the contention of Shri Bedi that the lower authorities should have disposed of, one way or the other, the merits of their submissions made in the said letter.

8. What however appears to us to be the strongest argument in the appellants' favour on the question of protest is the one arising from the proposal of the Central Government to review the order dated 17-1-78 of the Appellate Collector in another case of the appellants.

According to Shri Bedi the issue before the Central Government in that case was identical to the one which is before us for decision. After careful consideration of the appellants' submissions, the Central Government in their order dated 31-3-1980 had accepted the contention of the appellants that their letter dated 21-5-1970 was clearly a letter of protest. In view of this position, the Central Government had dropped the review proceedings and restored the order of the Appellate Collector. Shri Bedi submitted that while orders of the Central Government are not binding on this forum, nevertheless, their legal and persuasive value had to be taken into account. On the same facts and legal considerations, the Central Government had held the appellants' letter dated 21-5-1970 as a letter of protest. According to Shri Bedi, in fairness to the appellants, both in law and equity, we should also adopt the view taken by the Central Government in this behalf. Shri Bedi further emphasized that but for the setting up of the Tribunal, the present appeals would have been dealt with by the Central Government as these were originally preferred as revision applications.

In that event these would have been decided in appellants' favour by virtue of the Central Government's verdict in their favour in the other matter. The mere change of forum of appeal should not deprive the appellants of a vested right they had acquired by a favourable order of the revisionary authority. We have devoted considerable attention to the above submission of the learned Counsel. The learned SDR had pointed, out, and indeed it has been admitted by Shri Bedi, that the orders passed by the Central Government in-review/revision are not binding on us, particularly where an interpretation of law is involved.

However, the question whether in a particular case duty was paid under protest or not is largely one of fact, though no doubt questions of law may also arise. In the case referred to by Shri Bedi the Government of India had to deal with a factual position which was in all material respects the same as in the cases before us (only the period covered by the refund claim being different). The Government of India had before them the very same letter dated 21-5-1970 of the appellants. After careful consideration the Government took a considered view that the appellants' letter dated 21-5-1970 was rightly held by the Appellate Collector as a letter of protest. We consider that it would be inappropriate (though not inadmissible) for us to take a different view in the two matters before us, where an identical question (which as we observed is mainly one of fact) is involved. We accordingly accept the contention of Shri Bedi that the letter dated 21-5-1970 was a letter of protest and, therefore, by writing this letter, the appellants had protected their interests with regard to the limitation angle.

9. Regarding Shri Jain's reference to the judgment of the High Court of Mysore at Bangalore dated 7-1-1970 (para 5/ante), we do not see how the same is applicable to the facts of the present case. From the judgment of the court, it does not appear that the issue of a protest was involved in that case.

10. We have disposed of the question of limitation. As regards the merits of the appeals, the appellants contended before the lower authorities and before us that the charge of 30 paise per crate (for local deliveries) and 70 paise per crate (for out-station deliveries) was in the nature of 'equalised freight'. Shri Bedi stressed that this charge had been held as being in the nature of equalised freight by the lower authorities. In view of the law as was being interpreted by the lower authorities at the relevant time, the appellants were denied the deduction of equalised freight as being inadmissible. He submitted that the position had now been clarified by the pronouncement of the Supreme Court in its judgment 1983 ELT 1896 (SC) and that the deductions of 30 paise/70 paise per crate are in the nature of equalised freight and have to be excluded from the assessable value. As already observed, we had heard these appeals basically with reference to the question of limitation, since there was no decision on merits by the Appellate Collector. As we have taken the view that the claims were not barred by limitation, we are, as suggested by Shri Bedi, setting aside the combined Order-in-Appeal dated 24-3-1977 of the Appellate Collector, and remanding both matters to the Collector of Central Excise (Appeals), New Delhi, for fresh decision having regard to the latest position of the law as laid down by the Supreme Court, and taking the claims to be within time- We order accordingly.New Delhi Sd./- (S. Venkatesan) 11. I regret my inability to agree with my learned colleagues on the issues of jurisdiction and limitation arising in these Appeals.

12. The facts had been set out in the order proposed by them and it is unnecessary to recapitulate them except to the extent material or in controversy for consideration of the aforesaid issues. It would, hence, suffice to recall that - (a) on 31-3-1970, the concerned Superintendent, Central Excise determined the assessable values of the Appellant's products by orders described as appealable. It was stated therein (erroneously, as would appear below) that a representation against the said orders lay to the Assistant Collector; (b) the Appellant submitted a representation against the aforesaid orders on 21-5-1970 and a further representation on 26-5-1970 to the Assistant Collector, they remained undisposed of till now, (however, there is nothing on record to show that, as observed at page 3 ante, while this correspondence between the Appellant and the lower authorities was in progress, the Appellant was asked to file a price list in terms of Rule 173-C of the Central Excise Rules, 1944 (hereinafter, the Rules). The price lists were already filed and the assessable values fixed in terms of the order of the Superintendent's Order dated 31-3-1970; nor was any such list, if at all, filled pursuant to the direction of the Revenue, now the subject matter of these Appeals); (c) as many as twelve (and not ten as stated ante) refund applications for -the period between 1-3-1970 and 25-9-1974 [seven in respect of Plant No. 1 (A to G) and five in respect of Plant No. 2 (H to L) - vide statement of particulars of refund filed by the Appellant] were preferred on 16-12-1974. The claims at A to E and H to L were rejected in adjudication as well as in Appeal and are the subject matter, of the instant Revision Applications, heard as Appeals. The claim at 'G' was allowed by the Appellate Collector and refund also obtained. The claim at 'F' is now pending disposal before the Appellate Collector.

13. At the relevant time, it was provided, (insofar material), inter alia, (i) price lists were to be submitted where goods were to be assessed to duty ad valorem, showing merely the price of the goods and the trade discount, if any, (ii) the proper officer was to approve the price lists subject to such modifications as he may consider necessary, so as to correctly determine the assessable value thereof in terms of Section 4 of the Central Excises and Salt Act, 1944 (hereinafter, the Act); (iii) if in the list approved, an amendment became necessary, for any reason, fresh price lists or amended price lists were to be filed for the approval of such officer; (b) in terms of Section 35 of the Act, that an appeal against any decision or order of a Central Excise Officer, lay, in such cases as the Central Government directs to an officer not below the rank of an Assistant Collector and empowered in that behalf by the Central Government; (c) in terms of Rule 213 of the Rules, that an appeal against an order or decision of a Superintendent lay to the Deputy Collector to whom the Superintendent was subordinate and where there are no such Deputy Collectors to the Collector or Deputy Collector in charge of a Collectorate; (d) in terms of Rule 11 of the Rules that "no duties or charges which have been paid or have been adjusted in an account current maintained with the Collector, and of which payment, wholly or in part, is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be refunded unless the claimant makes an application for such refund under his signature and lodges it with the proper officer within three months from the date of such payment or adjustment, as the case may be".

14. In the facts and circumstances of these Appeals and in the context of the statutory provisions extracted supra, the questions of law that arise for consideration are - (a) Were the orders of the Superintendent dated 31-3-1970, determining the assessable value of the Appellant's goods, appealable and if so, where did the Appeals lie? (b) Did the statement in the aforesaid orders to the effect that a representation against the orders lay to the Assistant Collector, if contrary to the statutory provisions, vest him with jurisdiction to hear an Appeal against the said order, or estop the Respondent from contending to the contrary? What is the effect of the said statement? (c) Were the refund applications filed on 16-12-1974 for the period between 1-3-1970 and 25-9-1974 not barred in terms of Rule 11 of the Rules? 15. The answers are self-evident. Nevertheless, each of the aforesaid questions is taken up for consideration seriatim below :- (a) (i) An approval of a price list with or without modifications in accordance with Rule 173-C is indisputably a decision or order, quasi-judicial in nature [1978 ELT 229 - (Hindusthan Pilkington Glass Works Ltd. v. Superintendent, Central Excise) (ii) A right of Appeal is one conferred by statute. It is not an inherent right unlike the right to file a suit, but statutory. Thus, in AIR 1974 SC 1126, it was held that - "There is an inherent right in every person to bring a suit of a civil nature and unless the suit is barred by statute, one may, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous the claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and, therefore, an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute".

The Tribunal as well had held it so in 1983 ECR 1750 [Atma Steels Ltd. v. Collector of C.E.] and 1984(16) ELT 445 (Tribunal) [Collector of C.E. v. Crescent Dyes and Chemicals (iii) The statute that confers the right of appeal invariably prescribes the forum for the appeal as well, for, obviously unless the forum is prescribed, the right of appeal conferred cannot be exercised and remains inchoate. A right of appeal without a forum for exercising it is of no avail.

(iv) When once the forum for exercising the right of appeal is prescribed, that is the forum statutorily authorised to hear appeals. An appeal lies to the forum statutorily prescribed and to no other. It is only that forum in which jurisdiction is statutorily vested to hear an appeal that can hear and dispose it of. An Appellant goes to the wrong forum at his peril.

(v) In terms of Section 35 of the Act and Rule 213 of the Rules, a right of appeal against any decision or order of a Superintendent of Central Excise lay to the Collector or Deputy Collector as the case may be but not to an Assistant Collector. An Assistant Collector was not authorised to hear an appeal from an order of a Superintendent of C.E. (vi) The representation to the Assistant Collector was neither an Appeal as contemplated in the statute nor was it to a forum authorised by the statute to hear Appeals.

(b) Nor does it appear that the statement in the quasi-judicial order of the Superintendent to the effect that a representation could be made to the Assistant Collector against his order, (obviously erroneous, contrary, as it was, to the relevant statutory provision governing Appeals), vest or clothe the Assistant Collector with any jurisdiction to hear an Appeal which, otherwise, he had not. When jurisdiction was not conferred by statute, it cannot be inferred by the observation of the Superintendent. The principle of estoppel also cannot be invoked to evade the plain provisions of a statute. There is no estoppel against statute or on a question of law which jurisdiction, undoubtedly, is. The statement in the adjudication order is, in the premises, of no effect whatsoever.

(c) Accordingly, it has, necessarily, to be held that the order of the Superintendent, not having been appealed against to the forum authorised to hear such Appeal, had become final. Any assessments made in accordance with the assessable value determined therein cannot be reopened by means of a refund application, when, admittedly, a right to refund did not arise out of such assessment, or as modified in an Appeal, in the appropriate forum.

(d) Nor could it be said that payment of duties on the basis of the determination of the assessable value, which had become final, not having been appealed against, was a payment made in consequence of inadvertence, error or misconstruction in terms of Rule 11 of the Rules.

(e) Rule 11, as it read at the material time, provided for a period of three months for an application of refund from the date of payment or adjustment of the duty, as the case may be. There is no saving from the commencement or the efflux of the aforesaid period of three months in case the payment was made under protest. A provision of saving in case of protest was engrafted in the Rule by amendment only on 6-8-1977 and cannot apply to applications of refund filed before the said date. The discussion relating to payment under protest is, therefore, altogether irrelevant. In the premises, even if there is a case for refund and a right to claim it had accrued to the Appellant, it cannot extend to payments made beyond three months prior to 16-12-1974, the date of the refund applications i.e., 16- 9-197 4.

(f) In the premises, the Appeals, in my respectful opinion, fail since no right to claim refunds had accrued to the Appellant, and have to be dismissed.New Delhi, (M. Gouri Shankar Murthy)24th January, 1985.

Member (Judicial) In accordance with the view of the majority, these appeals are disposed of in terms of the -directions in para 10 of the majority order.

Sd/- Sd/- Sd/-(M. Gauri Shankar Murthy) (D.N.Lal) (S. Venkatesan)Member (Judicial) Member (Technical) Sr. Vice President


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