Refund of excess excise duty was allowed where disputed classification later proved the levy unauthorised and Rule 11 limitation did not apply.

Excise duty collected during a disputed classification was later treated as an unauthorised levy once the lower tariff entry was confirmed. The court held that the refund claim was not barred by the special limitation in Rule 11 of the Central Excise Rules, 1944, because the excess payment was not made through inadvertence, error or mis-construction while classification was still under examination. Money realised without authority of law could not be retained by the department on the basis of an inapplicable limitation rule, and the excess duty was therefore repayable.

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Issues: Whether the petitioner's claim for refund of excess excise duty was barred by limitation under Rule 11 of the Central Excise Rules, 1944, and whether refund was nevertheless payable when the duty had been realised on a classification later held to be incorrect.

Analysis: The duty had been collected while the proper classification of the goods was still under examination and the assessing authorities themselves were uncertain about the correct tariff entry. The excess payment was therefore not treated as having been made through inadvertence, error or mis-construction within the meaning of Rule 11. Once the Central Government finally held that the goods fell under the lower-rated entry, the extra duty retained by the department became an unauthorised levy. A claim for repayment of money realised without authority of law cannot be defeated by the special limitation under Rule 11 when that rule is inapplicable.

Conclusion: The refund claim was not barred by Rule 11 and the petitioner was entitled to repayment of the excess excise duty.

Final Conclusion: The impugned orders rejecting refund were set aside and the respondents were directed to repay the excess duty collected on the petitioner's goods for the relevant period.

Ratio Decidendi: Where excise duty is collected during a disputed classification and the levy is later found unauthorised, a refund claim is not governed by the limitation under Rule 11 if the payment was not made through inadvertence, error or mis-construction.

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