Duty payment under protest:

Sometimes, it happens that the classification and assessable value of goods determined by the excise authorities are not agreeable to or acceptable to the assessee. In such cases, the assesee can file an appeal and in the meanwhile he can pay duty under protest if no stay is obtained from Appellate Authorities.

Tribunal held that significance of ‘payment under protest‘ is that it safeguards the position of the person who makes the payment and ensures that it may not be claimed that the payment he made was a voluntary one [Alpha Electrical Products v. CCE 1987 (30) E.L.T. 752 (T)] (subsequently maintained by Supreme Court)

Time-limit of one year for claiming refund not applicable: Section 11B of the Central Excise Act, 1944 provides that the time limit of one year for claiming refund of excise duty shall not apply where the duty has been paid under protest.

Procedure for payment under protest: As per the Supplementary Instructions issued by Central Board of Excise and Customs, any assessee who desires to pay duty under protest, may do so by following the procedure mentioned below:

(a) The assessee shall inform the Superintendent or Inspector of Central Excise in writing giving reasons for paying duty under protest and dated acknowledgement will be given to him.

(b) The assessee shall mark invoices or monthly/quarterly returns indicating the goods on which duty is paid ‘under protest‘. If it is a lump-sum duty payment in respect of past demand, he may record the fact of duty payment under protest in the Personal Ledger Account, CENVAT Account and the Daily Stock Account.

(c) If a case is appealed against by the assessee or where the appeal period for further appeal is available, he may continue to pay duty under protest. However, if decision is not in his favour and he exhausts the appellate remedy or does not appeal within stipulated period, he shall not have any right to pay duty under protest.