Refund of duty collected without authority of law granted where exempt clearances were wrongly subjected to excise collection.

Excise duty collected on exempt clearances was held refundable because the manufacturer's production stayed within the exemption limit and no duty was legally leviable. The court accepted that a voluntary payment did not authorise the revenue to retain duty collected without authority of law, and the absence of a valid demand did not change the illegality of the collection. The petition was allowed, and refund was directed with interest at 12% per annum and costs.

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Issues: Whether excise duty paid on exempt clearances, when collected without authority of law, was refundable with interest and costs.

Analysis: The petitioners' production remained within the exemption limit under the notification governing nuts, bolts and screws, so no excise duty was payable. The amounts were nevertheless collected by the Excise authorities. A mere voluntary payment by the manufacturer did not authorise the Department to retain duty that was not legally leviable, and the absence of a valid demand did not alter the illegal character of the collection.

Conclusion: The duty was collected without authority of law and had to be refunded to the petitioners. The petition was allowed, with interest at 12% per annum and costs.

Ratio Decidendi: Duty collected by the revenue without legal liability or authority must be refunded, even if paid by the assessee.

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