Cenvat scrap at job-worker's premises need not be returned; refund and no unjust enrichment objection follow.

Under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, scrap generated at a job worker's premises was not required to be returned to the principal manufacturer, and non-return of that scrap did not by itself trigger reversal of credit or a fresh duty liability. The earlier 1944 regime requiring return of waste was distinguished as inapplicable. On that basis, duty paid on the scrap at the job worker's premises was held refundable to the principal manufacturer, and the objection based on unjust enrichment did not survive.

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Issues: Whether duty paid on scrap generated at the job-worker's premises was refundable to the principal manufacturer under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, and whether non-return of such scrap created any duty liability or attracted unjust enrichment.

Analysis: The earlier rule under the Central Excise Rules, 1944 requiring return of waste from the job-worker's premises was no longer in force. Under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, there was no requirement for return of scrap from the job-worker's premises and no provision requiring reversal of credit or payment of duty merely because the scrap was not brought back. The reasoning in the cited precedent on the earlier regime was distinguished, and the principle followed was that the principal manufacturer was not liable to pay duty on such scrap in the facts of the case.

Conclusion: The refund claim was admissible, the duty paid on scrap at the job-worker's premises was not recoverable, and the objection based on unjust enrichment did not survive.

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