JUDGMENT

Dr. ANAND, J.:—This appeal, by special leave, is directed against the judgment and order of the High Court of Delhi in Civil Writ No. 971 of 1978 dated 12-4-1982.

2. The respondent, carries on the business of manufacturing and selling cigarettes and smoking tobacco at its five cigarette factories including one at Saharanpur in the State of U. P. The respondent sells its products to whole-sale buyers or dealers who make further sales to secondary wholesalers from where the products reach the retailers and the consumers. During the period September 1, 1970, to February 28, 1973, the respondents followed the self removal procedure laid down in Chapter VIIA of the Central Excise Rules on payment of excise duty, as the manufacture of cigarettes affects excise duty under the Central Excises and Salt Act, 1944 (hereinafter the Act). The case of the respondent in the writ petition was that under a mistake of law regarding the true interpretation of Section 4(a) of the Act, it cleared its products but paid excess excise duty under the impression that the prices charged by the whole-sale dealers to the secondary whole-salers would form the correct basis of assessment and not the price at which goods were sold to whole-sale dealers. Consequent upon the judgment of this Court in the case of A. K. Roy v. Voltas Limited, 1973 (3) SCC 503, wherein it was held that under Section 4(a) of the Act, the value for the purpose of assessment is required to be determined on the basis of the price at which the manufacturer sells the products to the whole-sale dealers and not the price at which the whole-sale dealers further make a sale of the product to secondary wholesalers, the respondents filed five applications before the appropriate authority under the Act seeking refund of the excess excise duty paid under mistake of law. Two applications pertained to the period 1-9-70 to 28-5-71 and 1-6-71 to 19-2-72 involving refund of Rs. 23,68,686.85 and Rupees 26,21,356.16 respectively. The other three applications, related to the period 20-2-72 to 28-2-73. The Assistant Collector of Central Excise by his order dated 9-10-73 rejected all the five applications. The respondent preferred appeals before the Collector of Central Excise (Appeals). The Appellate Collector by an order dated 30-12-75, allowed the appeals arising out of the three refund applications relating to the period 20-2-72 to 28-2-73, and set aside the orders passed by the Assistant Collector and ordered consequential relief in favour of the respondent by directing the refund of the excess excise duty paid. The appeals pertaining to the refund applications for Rupees 23,68,686.85 and Rs. 26,21,356.16 for the period 1-9-70 to 28-5-71 and 1-6-71 to 19-2-72 respectively were however, rejected by the Collector (Appeals) on the ground that the same were barred by time. The respondents did not take the matter further under the statute but instead filed W.P. No. 971 of 1976 seeking quashing of. the order of the Collector of Central Excise (Appeals) dated 30-12-75 and also sought a direction by way of mandamus for refund of the sum of Rs. 49,90,043.01 with interest @ 12 per annum thereon. The Division Bench of the High Court came to the conclusion that on account of a mistake of law, excess excise duty had been paid by the respondent and received by the Department. The Bench held that there was a legal obligation on the part of the Government to return the excess excise duty received/ recovered by it since the same was not payable by the party. Relying upon their earlier judgment in Chemicals & Plastics v. Union of India, C.W.P. No. 147/79 decided on 10-7-79, the Division Bench allowed the writ petition filed by the respondents herein and held that the respondent could not be non-suited on the ground of limitation. The Court set aside the order of the Collector, Central Excise (Appeals) and directed the Department to refund the sum of Rs. 49,90,043.01 to the respondent. The Bench observed :

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