Appeal allowed for refund, remanded for lack of unjust enrichment proof. Order set aside.

The Tribunal allowed the appeal by way of remand, stating that the appellant was entitled to a refund subject to proving lack of unjust enrichment. The impugned order was set aside, and the matter was remanded for further proceedings.

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Issues:
1. Refund claim rejection based on duty paid on goods exempted but exported
2. Reversal of Cenvat Credit on inputs
3. Application of principle of unjust enrichment

Issue 1: Refund claim rejection based on duty paid on goods exempted but exported
The appellant, engaged in manufacturing medicaments, filed a refund claim for duty paid on goods cleared for export, claiming it was paid by mistake. The claim was rejected by the Original Adjudicating Authority citing failure to substantiate the reversal of Cenvat Credit and the goods being exempted under a notification. The rejection was based on Circular No. 940/01/2011-CX and the recovery of duty amount from foreign buyers. The appellant argued that the duty was paid voluntarily and relied on legal precedents supporting refund claims for exports. The Tribunal found that since the goods were exempted, the appellant was entitled to claim a refund despite paying duty voluntarily.

Issue 2: Reversal of Cenvat Credit on inputs
The lower authorities concluded that the appellant failed to prove the reversal of Cenvat Credit on exempted goods under Rule 6(3) of the Cenvat Credit Rules. However, the Tribunal noted that the export under bond exempted the clearance from certain rules, and since the fact of export was not disputed, the appellant was covered by the exemption clause. Therefore, the appellant was not required to reverse the Cenvat Credit on exported goods.

Issue 3: Application of principle of unjust enrichment
The lower authorities held that the appellant recovered the duty amount from foreign buyers, leading to unjust enrichment. The appellant disputed this, citing a government decision and lack of relevant case laws supporting unjust enrichment in export scenarios. The Tribunal observed that the refund claim was based on erroneous payment of duty, not rebate, and that the onus of proving lack of unjust enrichment lay with the appellant. The Tribunal directed the matter to be remanded to the Original Adjudicating Authority for the appellant to provide evidence regarding unjust enrichment.

In conclusion, the Tribunal allowed the appeal by way of remand, stating that the appellant was entitled to a refund subject to proving lack of unjust enrichment. The impugned order was set aside, and the matter was remanded for further proceedings.

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