Refund of excise duty paid under mistake of law cannot be defeated by limitation under refund rules.

Excise duty paid under a mistake of law was held refundable despite the limitation bar in the Central Excise Rules. Duty had been paid on the basis that the goods fell under Tariff Item 15A, but a subsequent trade notice clarified that they were outside that item and fell under Tariff Item 68. The refund claims, though rejected as time-barred under Rule 11 read with Rule 173J, were maintainable because the limitation rule could not defeat restitution of duty wrongly recovered. Later reference to Section 11B did not change that position for such claims, and refund was due.

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Issues: Whether excise duty paid under mistake of law could be refunded notwithstanding the bar of limitation under the Central Excise Rules.

Analysis: The duty had been paid on the footing that the goods fell within Tariff Item 15A, but the subsequent trade notice clarified that they were outside that item and fell under Tariff Item 68. The refund claims were rejected as time-barred under Rule 11 read with Rule 173J of the Central Excise Rules. The governing principle applied was that where duty is collected under a mistake of law, the limitation under the refund rule does not defeat restitution of the amount wrongly recovered, and the later reference to Section 11B did not alter that position for such claims.

Conclusion: The refund claims were not barred by limitation and were maintainable; the petitioners were entitled to refund.

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