Law: Central Excise Rules, 1944

Section: 9,11

[Central Excise Rules, 1944)]........Rr 9 & 11--Refund of amount of excise duty paid under mistake A fact--Excise duty leviable on 'Polyester Yarn' which in fact was a Specie of 'Nylon Yarn' subsequently reduced by Government through notification, but despite Such reduction in rate, Excise Department continued the levy of excise duty on previous rates by mistake treating Polyester Yarn' different from 'Nylon Yarn'--Claim for refund of amount paid by petitioner in excess within the year preceding date )f filing of claim was justified. ORDER AJMAL MIAN, J.--The petitioner through this petition has prayed for the following relief:- . "Therefore, it is respectfully prayed that this Hon'ble Court be pleased to direct the respondents to refund to the petitioner a sum of Rs.1,92,679:50 being the amount of excise duty realised from the petitioner under mistake of fact and law." 2. The brief facts leading to the filing of the above petition are that the petitioner which is a company incorporated under the provisions of Companies Act, 1913 has been manufacturing polyester yarn. Under the relevant notification excise duty at the rate of Rs.5 per pound was leviable on the polyester yarn and nylon yarn. It seems that under Notification No. SRO-5577/72, dated 3rd August 1972 the excise duty was reduced on nylon yarn to Rs.350 per pound. It may be advantageous to reproduce herein below item No. 40(d) mentioned at serial No. 33 of the said notification which reads as follows:- "(d) Nylon yarn, other than 40 three rupees Nylon yarn covered by and fifty paisas clause (a) or (b). per pound." 3. It seems that the Excise Department continued to levy the excise duty at the rate of Rs.5 per pound on polyester yarn even after the above SRO by treating the same as a different item than a specie of nylon yarn. Both the petitioners and the Excise Department under a mistake of fact continued to treat polyester yarn as observed hereinabove as a separate item other than nylon yarn. However, the Central Board of Revenue under Central Excise General Order No.3 of 1973, dated 4th July, 1973 hereinafter referred to as Order No.3, clarified that polyester yarn is in fact a specie of nylon…

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