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Issues: (i) Whether the Assistant Collector of Central Excise could entertain and decide a refund claim for excise duty paid by mistake of law when the claim was outside the period and scope of Section 11-B of the Central Excises and Salt Act, 1944; (ii) Whether a person could claim refund of excess excise duty paid by mistake of law from the Union of India even though the claim did not fall within Section 11-B of the Central Excises and Salt Act, 1944.
Issue (i): Whether the Assistant Collector of Central Excise could entertain and decide a refund claim for excise duty paid by mistake of law when the claim was outside the period and scope of Section 11-B of the Central Excises and Salt Act, 1944.
Analysis: The refund power of the Assistant Collector was held to be derived only from Section 11-B, which required an application to be made within six months from the relevant date and further barred entertainment of claims except as provided by the Act. A claim made beyond that statutory period could not be entertained by the departmental authority, and no direction could be issued to require consideration dehors the limitation prescribed by the statute.
Conclusion: The Assistant Collector had no authority or duty to consider a refund claim falling outside Section 11-B of the Central Excises and Salt Act, 1944, and the direction against him was set aside.
Issue (ii): Whether a person could claim refund of excess excise duty paid by mistake of law from the Union of India even though the claim did not fall within Section 11-B of the Central Excises and Salt Act, 1944.
Analysis: The right to recover tax or duty collected without authority of law was held to flow from Article 265 of the Constitution of India and Section 72 of the Indian Contract Act, 1872. A claim for refund against the Government was therefore not confined to Section 11-B, and the claimant could seek refund from the Union of India on the footing that the payment had been made under mistake of law. Since the application had been made to the Assistant Collector instead of the Government, the matter was directed to be considered by the Union of India upon the demand already made and available on record.
Conclusion: A refund claim for excess excise duty paid by mistake of law could be made against the Union of India even though it was outside Section 11-B of the Central Excises and Salt Act, 1944, and the direction to the Union of India was confirmed.
Final Conclusion: The statutory refund remedy before the departmental authority was held to be limited by Section 11-B, but a broader restitutionary claim against the Union of India for money collected without authority of law was upheld, leaving the appeal partly successful.
Ratio Decidendi: A departmental refund authority cannot act beyond the limitation and conditions prescribed by the taxing statute, but money collected by the State without authority of law is recoverable from the Government on the basis of Article 265 of the Constitution of India and Section 72 of the Indian Contract Act, 1872.
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