Refund claims cannot reopen finalised assessments; strict exemption proof and unjust enrichment must be established by the assessee.

A refund claim cannot be used to reopen a finalised, appealable assessment or to dispute whether the goods were dutiable; such objections must be raised in the statutory adjudication or appeal process. The exemption under Notification No. 74/93-CE was available only on strict compliance with its conditions, including proof that the goods were manufactured by a State Government factory and intended for use by a Government department, which was not established on the record. The assessee also failed to rebut unjust enrichment, as mere assertions or a general balance-sheet reference did not prove that the duty incidence had not been passed on. The refund claims were therefore unsustainable.

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Issues: (i) whether a refund claim could be used to reopen the correctness of a finalised assessment and to contend that the goods were not dutiable; (ii) whether exemption under Notification No. 74/93-CE was available; (iii) whether the claim was barred by unjust enrichment.

Issue (i): whether a refund claim could be used to reopen the correctness of a finalised assessment and to contend that the goods were not dutiable

Analysis: Where an assessment order is appealable and is not challenged in the manner provided by the statute, its correctness cannot later be questioned through a refund proceeding. Refund proceedings are not the proper forum to reopen the issue whether the process amounted to manufacture or whether the goods were dutiable. Such questions must be raised in the main adjudicatory proceedings or by the statutory appeal mechanism.

Conclusion: The refund claim could not be maintained to challenge the finalised assessment or the dutiability of the goods, and the issue was against the assessee.

Issue (ii): whether exemption under Notification No. 74/93-CE was available

Analysis: The exemption notification applied only when the goods were manufactured by a factory belonging to a State Government and were intended for use by a department of that Government. The record did not establish the necessary factual foundation for the exemption. Conditions attached to an exemption notification must be strictly complied with, and the required declaration had to be made in advance so that the Revenue could verify eligibility.

Conclusion: The assessee failed to establish entitlement to the exemption, and the issue was against the assessee.

Issue (iii): whether the claim was barred by unjust enrichment

Analysis: The burden to prove that the duty incidence had not been passed on lay on the assessee. Mere assertions or a general reference to the balance sheet were insufficient, as the balance sheet did not show whether the burden of duty on each invoice had been absorbed or passed on to the consumer.

Conclusion: Unjust enrichment was not disproved, and the issue was against the assessee.

Final Conclusion: The refund claims were unsustainable on merits, the exemption conditions were not established, and the assessees failed to discharge the burden on unjust enrichment; the appeals therefore failed.

Ratio Decidendi: A finalised and appealable assessment cannot be collaterally challenged through refund proceedings, and exemption benefits must be claimed and proved by strict compliance with the notification conditions, with the assessee also bearing the burden to rebut unjust enrichment.

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