Unjust enrichment in refund claims defeated where sister units did not avail Cenvat credit and evidence showed duty incidence was not passed on.

CESTAT New Delhi held that a refund claim was not barred by unjust enrichment where duty-paid goods were transferred to sister units for captive use and the recipient units had not availed Cenvat credit. The Tribunal relied on evidence including certificates from a Cost Accountant and the jurisdictional Range Superintendent, and noted that its earlier decision on identical facts had accepted similar material. As the Revenue produced no contrary evidence showing passing on of duty incidence, the burden of unjust enrichment was treated as discharged and the refund was allowed.

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Issues: Whether the refund claim was barred by unjust enrichment despite the goods being transferred to sister units for captive use and no Cenvat credit having been availed by the recipient units.

Analysis: The refund was not in dispute on merit. The decisive question was whether the duty incidence had been passed on. The evidence relied upon showed that the goods were cleared to the assessee's own sister units, that the recipient units had not availed Cenvat credit, and that this position was supported by certificates from the Cost Accountant and the jurisdictional Range Superintendent. The Tribunal also followed its earlier decision in the assessee's own case on identical facts, where similar evidence was accepted and the Revenue had not produced contrary material to show availment of credit by the buying unit.

Conclusion: The refund claim was held not to be hit by unjust enrichment and was allowed in favour of the assessee.

Ratio Decidendi: Where duty-paid goods are transferred to sister units and credible evidence shows that the recipient units did not avail Cenvat credit, the burden of unjust enrichment stands discharged and refund is admissible.

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