A person who has paid excise duty under a mistake of law is entitled to a refund of the duty if the application for refund is filed within six months from the date of knowledge of the mistake of law. However, the court may refuse to grant relief if the petitioner is guilty of laches.

( 1 ) REFUND of excise duty paid on aerated water under mistake of law after expiry of six months from the date of payment is the issue raised in this petition.

( 2 ) DISPUTE is about payment made between 18th March, 1973 and 17th June, 1977. Aerated water became exigible to duty with effect from 1st April, 1970 by introduction of Item I-D in the schedule of Central Excises and Salt Act, 1944. It read as under : "id -Aerated Waters, whether or not fla-voured Ten per centor sweetened whether or not containing ad valorem. vegetable or fruit juice of fruit pulp. "

( 3 ) IT was enhanced to 20% with effect from 17th March, 1972 on aerated water, in the manufacture of which blended flavouring concentrates in any form was used. In 1976 the entry i-D was amended and the amended entry reads as under :

"aerated Waters, whether or not flavoured or sweetened and whether or not containing vegetable or fruit juice or fruit pulp (1) Aerated waters, in the manufactures of which blended flavouring concentrates in anv form are used (a) For each unit container twenty-five paise. containing 200 millilitres orless (b) For each unit container Twenty-five paise plus ten paise containing more than 200 for every hundred millilitres milli-litres or fraction three in excess of 200 millilitres. (c) All others fifty-five per cent ad valorem. (2) All others twenty per cent ad valorem. "

But by a notification issued by Central Government on 16th March, 1983 in exercise of power conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 exemption was granted to aerated waters falling under sub-item (2) of Item No. I-D of the First Schedule from so much of the duty of excise leviable thereon as was in excess of ten per cent ad valorem. Therefore, aerated water in the manufacture of which blended flavouring concentrates was not used was exigible to duty at 1096 ad vaiorem, only, from 17th March, 1972 onwards.

( 4 ) M/s. Agra Beverages Corporation, the petitioner manufactured Coca-Cola and Fanta Orange from material supplied by Coca-Cola Export Corporation. Both these beverages are undisputedly aerated waters. Their exigibility to 20% duty depends on if they were manufactured with blended flavouring concentrates. That depends on as to what is meant by this expression. What would be included in it. The expression was explained by Bombay High Court in Duke and Sons Ltd. v. G. T. Rundani (Civil Misc. Writ No. 944 of 1977, decided on 8th/11th October, 1976 ). It was held that essence and concentrates were distinct and not synonymous with each other not only by their trade or commercial meaning but also in its technological sense and dictionary meaning. This decision was accepted by the Collector, Central Excise of Hyderabad in Appeal No. 80/79, decided on 22-2-1979 and it was held that in manufacture of Coca-Cola and Fanta blended flavouring concentrates were not used. The Collector further held that the manufactures were entitled to refund even though they had made declaration to the contrary. The importance of this decision lies in the fact that a three member committee of Government of India not only affirmed it on review on 26th September, 1980 but held that, government observe that the partys earlier declaration about their products containing blended flavouring concentrates was a clear case of mistake on their part. In yet. another decision in M/s. Chennai Bottling Co. , Madras decided by government of India on 26th September, 1980 the decision of Bombay High Court was followedand it was held, government agree with the petitioners stand that their earlier declaration about their products containing "blended flavouring concentrates", was a case of mistake of law. From decision of Bombay High Court and various orders of Government of India as Review committee it stands established that Coca-Cola and Fanta were manufactured with synthetic essence and not by blended flavouring concentrates. In coming to this decision reliance has been plac