Marketability is essential for excise duty, and refund cannot be denied on unjust enrichment without proof of passing on duty.

Aluminium alloy strips manufactured in the course of producing bimetal bearings were not dutiable under Tariff Item 27(b) because excise duty requires marketable goods, and marketability was not established. The refund claim succeeded because duty had been recovered under a protested classification list and an erroneous levy; once the levy was set aside, refund followed. The plea of unjust enrichment also failed because there was no affidavit or material showing that the duty burden had been passed on to consumers.

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Issues: (i) Whether aluminium alloy strips manufactured in the course of producing bimetal bearings were dutiable under Tariff Item 27(b) of the First Schedule to the Central Excises and Salt Act in the absence of marketability. (ii) Whether the assessee was entitled to refund of duty recovered under the classification list and whether the plea of unjust enrichment could defeat such refund.

Issue (i): Whether aluminium alloy strips manufactured in the course of producing bimetal bearings were dutiable under Tariff Item 27(b) of the First Schedule to the Central Excises and Salt Act in the absence of marketability.

Analysis: Excise duty can be levied only when the product is not merely covered by the tariff description but is also marketable goods. The Department did not establish that the aluminium alloy strips were marketable, while the appellate authority proceeded on the footing that marketability was irrelevant. That approach was inconsistent with the settled requirement that marketability is an essential ingredient for duty liability.

Conclusion: The aluminium alloy strips were not liable to excise duty under Tariff Item 27(b).

Issue (ii): Whether the assessee was entitled to refund of duty recovered under the classification list and whether the plea of unjust enrichment could defeat such refund.

Analysis: The classification list had been filed under protest and the duty was recovered under an erroneous view of liability. Once the levy and the supporting orders were set aside, refund followed as a consequence. The plea of unjust enrichment was not supported by any affidavit or material showing that the duty had been passed on to consumers, and therefore it could not be accepted.

Conclusion: The assessee was entitled to refund, and the objection based on unjust enrichment failed.

Final Conclusion: The impugned excise demand was unsustainable, and the assessee obtained relief against the duty levy as well as consequential refund.

Ratio Decidendi: A product is not dutiable under the excise tariff unless it is marketable goods, and refund of duty paid under an erroneous levy cannot be denied on a bare plea of unjust enrichment without proof that the duty burden was passed on.

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