Refund limitation under Section 11B does not apply to tax paid without legal liability, the court affirmed.

Service tax paid without legal liability, whether under a mistake of fact or law, is treated as money paid by mistake rather than validly leviable duty. The Delhi High Court noted the consistent view of several High Courts that the department has no authority to retain such amounts, so the refund limitation in Section 11B of the Central Excise Act, 1944 does not govern a claim for return of money so paid. On that basis, Section 11B was held not to bar the refund claim, and the challenge to the refund order failed.

---

---

Issues: Whether refund of service tax paid under a mistake of fact or law is barred by the limitation under Section 11B of the Central Excise Act, 1944.

Analysis: The Court noted the consistent view of several High Courts that where tax is paid without legal liability, the payment does not acquire the character of duty validly leviable under law. In such cases, the department has no authority to retain the amount, and the limitation prescribed for refund of duty under Section 11B does not govern a claim seeking return of money paid by mistake.

Conclusion: Section 11B of the Central Excise Act, 1944 does not bar the respondent's refund claim, and the challenge to the refund order fails.

---