1987 (12) TMI 47 - HC - Central Excise

Summary

Issues:
1. Refusal of refund claim by Assistant Collector of Central Excise based on limitation period.
2. Determination of mistake as a mistake of fact or law in relation to classification of goods for excise duty purposes.

Detailed Analysis:
Issue 1: The petition was filed by the Petitioner-Company against the Assistant Collector of Central Excise's order refusing to refund the claim, citing it was beyond the limitation period prescribed by rule 11 of the Rules. The Court referred to a previous decision and observed that the doctrine of unjust enrichment does not apply when taxes are collected by the State without the authority of law. The Court emphasized that if a mistake of law is discovered in the demand and payment of duty, the person who collected the duty without authority must refund it. The Court held that the claim for refund cannot be barred by limitation in such cases.

Issue 2: The Court examined whether the mistake made by the Petitioner-Company was a mistake of fact or law in relation to the classification of goods for excise duty. The Assistant Collector's finding confirmed that the classification was approved through a mistake by the assessee, and the duty was paid accordingly. The Court determined that the mistake on both sides, including the classification error, was a mistake of law. Therefore, the Court directed the Respondents to refund the claimed amount to the Petitioner-Company.

Conclusion: The Court ruled in favor of the Petitioner-Company, directing the refund of the claimed amount as the mistake in classification of goods for excise duty purposes was deemed a mistake of law. The judgment highlighted the principle that taxes collected without legal authority must be refunded, emphasizing the importance of correcting errors in duty payments. The Court's decision was based on the consistent view taken in previous cases, rejecting the application of limitation period rules in such circumstances.