The main legal point established in the judgment is that the court has the discretion to order the refund of taxes or excise duty paid without liability in law, even if the period of limitation for a suit is over, especially when the delay in seeking the refund is attributed to misleading instructions or the conduct of the authorities.

( 1 ) THESE appeals are presented by the Assistant collector of Central Excise and Union of India against the order of the learned single Judge allowing the Writ Petitions presented by the respondent herein.

( 2 ) THE facts of the case, in brief, are as follow:- The respondent-company (writ petitioner) is a manufacturer of copper and copper alloy castings. For the period commencing from 1-3-1975 upto 26-12-1980 the respondent had paid excise duty amounting to a sum of Rs. 3,64,961/ -. On 12-4-1979 the company was informed by its customer, that, there was a Notification in force issued by the Central Government, according to which there was an exemption from payment of excise duty on copper and copper alloy castings. On 20th of April 1979 the responds addressed a letter to the Superintendent of central Excise, seeking clarification regarding exemption of Copper and Copper alloy castings. The Superintendent of Central Excise in his letter dated 28-11-1979 confirmed that the product was exempt from payment of Excise Duty under Notification No. 119/66-CE dated 16-7-1966. Thereafter the respondent made two refund claim applications on 27-9-1980 and 29-12-1980. These applications were kept pending for nearly four years and they were rejected on 31-8-1984. Immediately thereafter the respondent presented writ petitions on 29-10-1984. In the writ petitions, the respondent claimed that the excise duty had been paid by the respondent though it was not liable to pay and therefore there was no justification for declining to grant refund of the excise duty so paid. The respondent also relied on a Circular said to have been issued by the Central Board of Excise and Customs on 8-5-1973 in exercise of its power under rule 233 of the Central Excise Rules in which the Central Board stated that in cases of applications for refund of the excise duty paid by mistake refund may be granted if application was made within the expiry of limitation for filing of suits for recovery of excise duty paid by mistake. There was no dispute that according to Rule 11 of the Central excise Rules, as stood at the relevant point of time the period of limitation fixed for claiming the refund was six months and the application of the respondent was made after the expiry of six months and it was also not disputed that it was made within 3 years from 12-4-1979, the date on which the mistake came to be known to the respondent.

( 3 ) THE learned Judge held that though the application was made beyond the period of six months prescribed under Rule 11 of the rules, as the application was made within 3 years from the date on which the mistake was discovered by the respondent, the refund should be ordered. Accordingly, the writ petitions were allowed. Aggrieved by the said order of the learned single Judge, the appellants who were respondents in the writ petitions have filed this appeal.

( 4 ) SRI Ashok Haranahally, learned central Government Standing Counsel, contended that Rule 233 of the Central Excise rules did not authorise the Central Board of excise and Customs to give any directions contrary to any of the Rules and therefore the Circular in question which was contrary to Rule 11 of the Rules was not binding on the authorities and was unenforceable. The learned Counsel submitted that the decision of the Supreme Court in K. P. Varghese v i. T. O. (1311. T. R. 597) and other decisions of the Supreme Court holding that Circulars issued by the Central Board of Direct Taxes was binding on all the subordinate revenue authorities was not apposite to this case for the reason that the Central Board of Excise was given the power to issue instruction by section 119 of the I. T. Act which provides that the instructions issued by the Board shall be binding on all the subordinate authorities, but in the present case, Rule 233 of the Central Excise Rules only authorised the Central Board of Excise and Customs to issue instructions providing for any supplemental matters a