ORDER
G. Sankaran, Sr. Vice-President
1. This appeal is directed against Order-in-Appeal No. 728-CE/DLH/84 dated 22.9.1984 passed by the Collector of Central Excise (Appeals), New Delhi.
2. The facts of the case, briefly stated, are that the appellants are engaged in the manufacture of P and P medicines, falling under Item No. 14E of the Central Excise Tariff Schedule. This was one of the items covered by Central Excise Notification No. 80/80, as In force at the material time. By this notification, P and P medicines, among other items, were exempted from the whole of the duty leviable thereon on the first clearances during a financial year aggregating to a value of Rs. 7.5 lakhs. The next Rs. 7.5 lakhs of the goods were exempted to the extent of 25% of the duty leviable. The exemption was subject to several conditions. The appellants did not, however, claim duty exemption under this notification during the relevant time (1981-82) but cleared the goods on payment of the full duty leviable. Later on, they filed two claims for refund of the duty paid – one on 24.2.1982 for Rs. 14,273.76 covering the period 1.4.1981 to 31.8.1981 and the other on 28.7.1982 for Rs. 2,026.25 covering the period 1.2.1982 to 31.3.1982. It was contended that the total value of clearances during 1981 -82 were to the extent of Rs. 8,72,164.65 only and that, therefore, they were eligible for full duty exemption on the goods upto the value of Rs. 7.5 lakhs and 25% duty exemption on the balance. The Assistant Collector dismissed the claims because the appellants had not made a claim for the benefit of the notification in the classification list 24/80 In force from 1.3.1981. He also did not accept the appellants’ contention that they were ignorant of notification 80/80 because they had claimed the benefit of the predecessor notification 71/78 in classification list 8/79 in force from 1.3.1979. In appeal, the Collector (Appeals) held that mere failure to declare in the classification list their intention to avail themselves of the benefit of notification 80/80 would not have disentitled the appellants from refund of the duty paid by them by mistake. If on coming to know of the mistake, they had filed the claim within the statutorily stipulated time. In this case, the appellants were not ignorant but careless and the department could not go to the rescue of such appellants. The appeal was dismissed on this baste. It is this order which is under challenge before us.
3. We have heard Shri J.S. Agarwal, consultant, for the appellants and Shri C.V. Durghayya, DR, for the respondent.
4. The appellants do not deny that they did not claim the benefit of notification 80/80 In the relevant classification list but they contend that they were nevertheless entitled to the exemption and the claims having been filed in time, refund ought to be allowed. The counsel for the appellants cited in this context the Bombay High Court judgment In Ceaf Tyres of India Ltd. v. Union of India and Ors. 1980 ELT 563 and the Tribunal’s decision in Sahu Cylinders & Udyog Pvt. Ltd. v. Collector of Central Excise, Madras 1986 (26) ELT 394. Shri Durghayya, for the respondent, however, urged that the lapse on the appellants’ part was not ignorance of law but carelessness and since they had not claimed the benefit of the notification, they were not entitled to It in retrospect. He could not, however, cite any authority in support of his stand.
5. We have carefully considered the submissions of both sides. In the case of Ceaf Tyres (Supra), the Bombay High Court has held, in the context of Section 72 of the Indian Contract Act, that the department cannot be allowed to take advantage of the mistake committed by the petitioner in paying a higher amount to the department and the department cannot be allowed to retain any such amount which it would not have received but for the mistake on the part of the petitioner in paying it in the first place. In the case of Sahu Cylinders (Supra), this Tribunal rejected the contention that merely because an as-sessee paid duty voluntarily in excess, he is not entitled to claim refund thereof.
6. In the present instance also, the appellants cannot be denied the benefit of Notification No. 80/80 only on the ground that they had paid duty without claiming its benefit at the time of clearance of the goods. We, therefore, set aside the orders of the lower authorities and remand the matter to the Assistant Collector for de novo consideration of the claim with reference to Notification No. 80/80 and other provisions of law.