Retrospective exemption entitled refund of duty collected without authority of law, but computation had to follow statutory procedure.

Where a later-approved classification placed the goods within a tariff entry covered by a retrospective exemption, duty collected for that period was without authority of law and the refund claim was maintainable. The HC held that the retrospective exemption operated for the relevant period to the extent permitted by law, entitling the assessee to refund of the duty collected. However, the actual refund could not be ordered directly by the Court; it had to be quantified and processed by the competent authority under the amended refund provision in accordance with the statutory scheme.

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Issues: (i) Whether the assessee was entitled to refund of excise duty paid for the period before the exemption took effect under the retrospective exemption statute; (ii) Whether the refund claim had to be decided afresh by the departmental under the amended refund provision.

Issue (i): Whether the assessee was entitled to refund of excise duty paid for the period before the exemption took effect under the retrospective exemption statute.

Analysis: Once the later classification was approved, the goods cleared from 12 April 1986 fell under the tariff entry attracting total exemption by the relevant notification, and the duty collected for that period had no authority of law. The retrospective exemption legislation was intended to preserve the earlier duty position only to the extent legally permissible and to confer retrospective effect on the exemption notifications for the relevant period.

Conclusion: The refund claim was maintainable and the assessee was entitled to refund of the duty collected for that period.

Issue (ii): Whether the refund claim had to be decided afresh by the departmental under the amended refund provision.

Analysis: In view of the amended refund provision, the proper course was not direct payment by the Court but determination of the refundable amount and the destination of the refund by the competent authority in accordance with the statutory scheme.

Conclusion: The matter was required to be remitted to the competent authority for computation and decision under the amended refund provision.

Final Conclusion: The assessee succeeded on entitlement to refund, but the actual refund was to be determined and processed by the department under the amended statutory procedure.

Ratio Decidendi: Where duty is collected after a later-approved classification and the goods are covered by a retrospective exemption, the levy is without authority of law and refund follows, but the grant of refund must conform to the governing statutory procedure.

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