Allied Chemical & Pharmaceuticals Pvt. Limited Vs CCE&ST (CESTAT Delhi)
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has directed the Central Excise department to refund the entire amount of excise duty, totalling Rs. 9,35,97,502, paid under protest by M/s Allied Chemical & Pharmaceuticals Pvt. Limited. The ruling overturns a previous order by the Commissioner (Appeals) that had denied the entire refund claim.
The dispute originated from excise duty demands raised by the department on bulk drugs containing Atropine manufactured by Allied Chemical. Despite disputing the levy, Allied Chemical paid the demanded duty under protest for a period spanning from April 2006 to March 2014. These payments were made partly through the utilisation of Cenvat Credit accumulated on inputs and partly through the taxpayer’s personal ledger account (PLA). The payment under protest was formally intimated to the Central Excise Division, Jaipur, via a letter dated January 31, 2007, where the company reserved its right to claim a refund once the underlying dispute regarding the taxability of the product was decided in its favour by the appellate forums.
Following a favourable decision in the classification or exemption dispute at a higher appellate level (as implied by the nature of a refund claim for duty paid under protest), Allied Chemical filed applications seeking a refund of the total duty paid under protest, amounting to Rs. 9,35,97,502.
