Refund of mistaken excise duty allowed under Rule 11, but only payments made after proved protest were protected.

Amounts collected and recorded as excise duty under an erroneous interpretation of the tariff could be refunded under Rule 11 of the Central Excise Rules, 1944, because the rule was broad enough to cover duty realised through mistake or misconstruction, even where the commodity was later found not to be excisable. However, protest protected only payments made after protest was shown to have begun; on the facts, the protest started on 8-7-1963, so payments made before that date were time-barred. Refund relief was therefore confined to duty paid from 8-7-1963 onwards.

---

---

Issues: (i) whether refund of amounts collected as excise duty on Compreg, though it was not excisable during the material period, could be granted under Rule 11 of the Central Excise Rules, 1944; (ii) whether the refund claim was barred in respect of payments made before the protest letter dated 8-7-1963.

Issue (i): whether refund of amounts collected as excise duty on Compreg, though it was not excisable during the material period, could be granted under Rule 11 of the Central Excise Rules, 1944.

Analysis: The amounts had been assessed, collected and accounted for as duty in the statutory records, despite the assessee's protest, and the collection resulted from an erroneous interpretation of Item 16-B. Rule 11 was not to be read so narrowly as to become ineffective merely because the commodity was later found not to be excisable. A reasonable construction of the rule covered money collected as duty through error or misconstruction, and the departmental authority had jurisdiction to grant refund.

Conclusion: The refund claims were maintainable under Rule 11, and the assessee succeeded on this issue.

Issue (ii): whether the refund claim was barred in respect of payments made before the protest letter dated 8-7-1963.

Analysis: On the assessee's own case, the protest commenced only from 8-7-1963. Protest could protect only those payments made after that date, and no earlier protest or claim was shown. The period prior to the protest therefore remained outside the protection of Rule 11 and was hit by time bar.

Conclusion: The refund claim for the period before 8-7-1963 was time-barred and failed against the assessee.

Final Conclusion: The appeals were allowed in part, with refund relief confined to duty payments made from 8-7-1963 onwards and the earlier period excluded.

Ratio Decidendi: Amounts collected and entered as excise duty pursuant to an erroneous or misconceived duty levy may be refunded under Rule 11 of the Central Excise Rules, 1944, but refund protection based on protest operates only from the date protest is shown to have been made.

---