Refund of excise duty paid under mistake of law cannot be barred by limitation when collection lacked authority of law.

Refund of excess excise duty paid under a mistake of law could not be denied on limitation grounds where the levy was collected without authority of law. The High Court stated that the State cannot retain duty collected illegally, and the refund limitation machinery under Rule 11 and Section 11B(2) could not defeat restitution in such a case. It also accepted that relief could be granted in writ jurisdiction instead of forcing the assessee through prolonged statutory proceedings. The impugned order rejecting the refund was therefore unsustainable, and the assessee was entitled to refund of the disallowed excess duty.

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Issues: Whether the refund claim for excess excise duty paid under a mistake of law could be rejected as time-barred under Rule 11 of the Central Excise Rules and Section 11B(2) of the Central Excises and Salt Act, 1944.

Analysis: The duty had been paid in excess because of a mistake of law, and the Revenue had no authority to retain amounts collected without authority of law. A claim for refund on that footing was not defeated by the limitation machinery relied upon by the department. The Court also followed the view that such illegal levy could be corrected in writ jurisdiction without driving the assessee to prolonged statutory proceedings.

Conclusion: The refund claim could not be rejected as time-barred, and the impugned order disallowing the claim was unsustainable.

Final Conclusion: The assessee was entitled to refund of the disallowed excess excise duty, and the departmental order was quashed.

Ratio Decidendi: Tax or duty collected without authority of law and paid under a mistake of law cannot be retained by the State, and the usual refund limitation cannot defeat restitution of such illegal collection.

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