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Claim for refund of excise duty paid under a mistake of law on scantlings. Application dismissed on grounds of limitation under Section 11-B of the Central Excise Act. Analysis: The petitioner, engaged in designing and erecting cooling towers, paid excise duty on scantlings during 1-3-1975 to 17-11-1980, believing it to be excisable. Upon realizing through a Supreme Court judgment that scantlings were not liable to excise duty, the petitioner sought a refund in February 1981. The respondents rejected the claim, citing scantlings as excisable and barred the application on grounds of limitation under Section 11-B. The Assistant Collector's order and subsequent appeals upheld the denial of refund based on limitation. The High Court, after considering arguments, held that the right to refund for payments made under a mistake of law is not dependent on whether the payment was made under protest. The court ruled that the limitation under Section 11-B does not apply to such claims. Citing previous decisions, the court emphasized that the three-year rule for claims of refund applies from the date of knowledge of the mistake of law. The court referred to cases like Guru Charan Industrial Works v. Union of India and Roman Electricals, Mathura v. Union of India, where similar principles were upheld. The court noted that the petitioner's application for refund was filed promptly after realizing the mistake in February 1981, well within the three-year limitation period. Even though the Tribunal's decision on scantlings' non-liability to excise duty was in 1988, the court asserted that the jurisdiction under Article 226 of the Constitution allows for relief within three years of knowledge of the mistake. The court emphasized that even if a claim is barred by statutory limitation, the power of the court under Article 226 remains available within the prescribed time frame. Consequently, the court held that the petitioner was entitled to a refund of excise duty paid on scantlings between 1-3-1975 to 17-11-1980, regardless of whether the payment was made under protest. The court directed the Assistant Collector to refund the amount within two months of receiving the judgment copy, without imposing any costs on the parties.
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