Mistake of law limitation in excise refund claims fails where earlier awareness and lack of reasonable diligence are shown.

Excise duty refund based on a claimed mistake of law was rejected where the appellant sought to compute limitation from later discovery of a classification error. The Tribunal held that the trade notice relied on was not a judicial pronouncement and could not by itself establish discovery of a mistake of law for limitation purposes. It also found that the appellant was already aware of the disputed classification position earlier, and there was no material showing that the alleged mistake could not have been discovered with reasonable diligence. On that basis, the discovery-based limitation argument failed and rejection of the refund claim for the earlier period was upheld.

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Issues: Whether the appellant was entitled to refund of excise duty for the earlier period on the footing that the claim was made within limitation computed from the date on which the alleged mistake of law was discovered.

Analysis: The claim for refund was sought to be sustained on the basis that limitation should run from discovery of the alleged mistake in classification. The Tribunal found that the trade notice relied upon was not a judicial pronouncement and could not itself establish discovery of a mistake of law in the relevant sense. The record also showed that the appellant had been aware of the disputed classification position long before the later trade notice, and there was no material to show that the mistake could not, with reasonable diligence, have been discovered earlier. On that basis, even assuming the Limitation Act applied, the appellant could not invoke the benefit of the discovery-based rule.

Conclusion: The refund claim for the earlier period was not time-barred in the appellant's favour on the pleaded basis, and the rejection of that part of the claim was upheld.

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