Chapter X duty refund: payment during appeal treated as protest, with limitation and unjust enrichment rejected.

Refund claims arising from denial of concessional duty under Chapter X procedure were treated as not barred by limitation where the duty payment was made while pursuing the appeal and was regarded as payment under protest. The ruling also held that unjust enrichment did not apply when the price of the final product was controlled, the duty incidence was not passed on, and the claimant produced challans, invoices, RT-12 returns and related records. On that basis, the refund could not be denied for alleged absence of original duty-paying documents, and the Revenue's challenge failed.

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Issues: (i) whether the refund claim was barred by limitation, and whether payment of duty during the pendency of the appeal amounted to payment under protest; (ii) whether the refund was hit by unjust enrichment and could be denied for want of original duty paying documents.

Issue (i): whether the refund claim was barred by limitation, and whether payment of duty during the pendency of the appeal amounted to payment under protest

Analysis: The claim arose from rejection of permission to procure raw naphtha at concessional duty for use in manufacture under Chapter X procedure. The refund was claimed after the appellate order recognising entitlement to concessional duty, and the Court treated the buyer in this special procedural setting as not falling within the ordinary meaning of purchaser for the purpose of the relevant-date clause. It held that the challenge to denial of CT-2 certificate and the payment made while pursuing the appeal amounted to protest, so the limitation bar in Section 11B did not apply.

Conclusion: The refund claim was not time-barred, and the duty payment was treated as payment under protest.

Issue (ii): whether the refund was hit by unjust enrichment and could be denied for want of original duty paying documents

Analysis: The Court accepted the evidence that the price of the final product was controlled and the duty incidence on naphtha was not passed on. It also found that the claimant had filed supporting challans, invoices, RT-12 returns, and other duty-related records, and that the department had acted on the same documentation for issuing CT-2 certificates for the later period. On that basis, the objection of unjust enrichment and the objection regarding absence of proper duty paying documents were rejected.

Conclusion: The refund was not barred by unjust enrichment and could not be denied for alleged lack of supporting documents.

Final Conclusion: The Revenue's challenge failed, and the order granting refund relief was sustained.

Ratio Decidendi: In a claim for refund arising from denial of concessional duty under Chapter X procedure, payment made while pursuing appellate remedy may be treated as payment under protest, and where the incidence of duty is not passed on and supporting duty documents are produced, limitation and unjust enrichment do not defeat the refund.

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