- (1.) The petitioner company which is engaged in the business of manufacturing Glycerin and Fatty Acid claims refund of an amount of Rs. 15,32,134.08 ps. of excise duty paid during the period commencing from July 1, 1982 to January 27, 1985 inter alia on the ground that the duty was paid under mistake of law and therefore it is entitled to restitution and also on the ground that the tax could not have been levied and collected in contravention of the provisions of Article 265 of the Constitution of India.
(2.) The petitioner manufactures three different varieties of Glycerine, namely, (i) Glycerine Mono Stearate SE (10); (ii) Glycerine Mono Stearate SE; and (iii) Glycerine Mono Stearate NSE. The petitioner as well as the department considered the aforesaid articles to be falling under Tariff Item No. 68, i.e. not elsewhere specified, of the First Schedule to the Central Excises and Salt Act, 1944 ('the Act' for short). Therefore the petitioner paid excise duty on the basis that the product was covered by Tariff Item No. 68. According to the petitioner it was a mistake to consider the article falling in Tariff Item No. 68, inasmuch as the article could be called organic surface active agent and therefore covered by Tariff Item No. 15AA of the First Schedule to the Act. Hence sometime in June 1985 the petitioner applied for reclassification of the product. Samples were drawn by Chemical Analyser on June 27, 1985 and on August 13, 1985. In November, 1985 Chemical Analyser submitted report to the appropriate authority of the excise department. As per the report the product was covered by Tariff Item No. 15AA of the First Schedule to the Act and therefore it was liable to excise duty as organic surface active agents. Tariff Item No. 15AA read as follows : "Organic surface active agents (other than soap) surface active preparations and washing preparations whether or not containing soap. Twenty per cent ad valorem." These products were liable to excise duty at the rate of 20 per cent ad valorem.
(3.) However, in the case of the products falling under Tariff Item No. 15AA exemption could be availed of by the manufacturers if they satisfied the conditions laid down in Notification No. 208 of 1969 dated August 27, 1969. The petitioner contended that it was entitled to exemption. Hence it preferred refund claim on December 23, 1985 which was received by the department on January 3, 1986. The claim covered the period commencing from January 28, 1985 to December 13, 1985 and it was for Rs. 4,75,331.50 ps. The claim was made on the ground that the duty was paid erroneously and therefore it was required to be refunded. After issuing the show cause notice and after adjudication the Assistant Collector passed order dated October 15, 1986 and allowed the claim of Rs. 2,08,434.00 for the period of six months prior to the date of filing of the application i.e. for the period commencing from July 3, 1985 to December 13, 1985. Rest of the claim for the period commencing from January 25, 1985 to July 2, 1985 has been rejected on the ground that the claim was preferred beyond the prescribed period of limitation as provided under Section 11B of the Act.;