Supreme Court classification binding on Revenue; body-built vehicles qualified for exemption and refund claims survived unjust enrichment challenge.

Classification of motor vehicles made by body-building on customer-supplied chassis remained governed by the Supreme Court's ruling classifying such goods under Heading 87.07 and recognising the linked small scale industry exemption. That classification bound the Revenue under Article 141 and applied to identical goods, so the challenge on classification and exemption failed. The refund claims were also not barred by unjust enrichment because the lower appellate authority found, on the evidence, that the bar did not apply and the Revenue produced no rebuttal. The refund orders were therefore upheld.

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Issues: (i) whether the respondents were entitled to the benefit of the Supreme Court's classification ruling on body-building on chassis and the related small scale industry exemption; (ii) whether the refund claims were barred by unjust enrichment.

Issue (i): whether the respondents were entitled to the benefit of the Supreme Court's classification ruling on body-building on chassis and the related small scale industry exemption.

Analysis: The dispute concerned the classification of motor vehicles emerging from body-building on customer-supplied chassis. The applicable period was after the amendment that brought such activity within the excise regime. The Tribunal noted that the Supreme Court had conclusively classified such goods under Heading 87.07 and had recognised the availability of the small scale industry exemption under the relevant notification. It further held that the classification declared by the Supreme Court bound the Revenue under Article 141 of the Constitution of India and applied uniformly to manufacturers of identical goods. The earlier Tribunal order relied on by the Revenue did not displace this position.

Conclusion: The respondents were entitled to the benefit of the Supreme Court's ruling, and the Revenue's challenge on classification and exemption failed.

Issue (ii): whether the refund claims were barred by unjust enrichment.

Analysis: The lower appellate authority had examined the evidence and found that the refund claims were not hit by the bar of unjust enrichment. The Revenue did not produce material to rebut that finding.

Conclusion: The refund claims were not barred by unjust enrichment.

Final Conclusion: The impugned orders granting refund were upheld and the Revenue's appeals failed in entirety.

Ratio Decidendi: A classification declared by the Supreme Court for identical goods is binding on the Revenue, and a refund cannot be denied on unjust enrichment when the factual finding that the bar does not apply remains unrebutted.

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