(1) When a copy of an instrument is sent to the Collector under subsection (1) of section 37, he may, if he thinks fit, refund the whole or any portion of the penalty in excess of ten rupees which has been paid in respect of such instrument.

(2) When such instrument has been impounded only because it has been written in contravention of section 13 or section 14, Collector may refund the whole penalty so paid.