Unjust enrichment plea may be raised on appeal; refund dispute remanded for fresh examination of passing-on evidence.

A plea challenging the applicability of unjust enrichment under the Central Excise Act was treated as a legal issue that could be raised at the appellate stage and was not rejected as a new plea. The matter was remanded because the question of whether the duty burden had been passed on in captive consumption required fresh examination by the original authority. The authority was directed to consider the refund claim, examine the balance sheet and chartered accountant's certificate, and decide the pleaded non-applicability of unjust enrichment after hearing both sides. The impugned order was set aside and the refund dispute left open for reconsideration.

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Issues: (i) Whether a legal plea against applicability of unjust enrichment under Section 11AB(2)(c) of the Central Excise Act, 1944 could be raised at the appellate stage; (ii) whether the matter required remand for fresh examination of the refund claim and the evidence relating to unjust enrichment in captive consumption.

Issue (i): Whether a legal plea against applicability of unjust enrichment under Section 11AB(2)(c) of the Central Excise Act, 1944 could be raised at the appellate stage.

Analysis: The plea was treated as a legal issue that could be raised by either side at any stage. The objection that it was a new plea was not accepted, and the matter was not rejected on that ground.

Conclusion: The plea could be raised at the appellate stage and was required to be considered on merits.

Issue (ii): Whether the matter required remand for fresh examination of the refund claim and the evidence relating to unjust enrichment in captive consumption.

Analysis: The decision on unjust enrichment in captive consumption was held to require fresh examination by the original authority. The respondents were to be given an opportunity to establish that the duty burden had not been passed on, and the balance sheet and chartered accountant's certificate were directed to be examined. The authority was also directed to consider the plea based on non-applicability of unjust enrichment under the cited provision and then pass a fresh order.

Conclusion: The impugned order was set aside and the matter was remanded for fresh adjudication after hearing both sides.

Final Conclusion: The department succeeded in obtaining reversal of the earlier order, but the substantive refund dispute was left open for reconsideration by the original authority.

Ratio Decidendi: A legal plea affecting applicability of unjust enrichment may be raised at any stage, and where the factual basis for passing on of duty remains unexamined, the matter can be remanded for fresh adjudication after giving due opportunity to the parties.

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