Excise rebate under exemption notification quashed for non-compliance with recalculation directions and unsupported reliance on unjust enrichment.

An excise rebate rejection under an exemption notification was held unsustainable because the authority had not complied with earlier directions to recalculate the rebate by first determining average production for the preceding five years and then applying Clause (2) to excess production. The impugned order also failed to give reasons showing why the claim was inadmissible under the notification. Reliance on unjust enrichment under Section 11B could not save the rejection, as that ground was not reflected in the impugned decision and the binding earlier directions had not been followed. The rejection was quashed and the matter remitted for fresh decision in accordance with those directions.

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Issues: Whether the order rejecting the petitioner's claim for excise rebate under the exemption notification could stand when the earlier directions for recalculation of the rebate had not been followed, and whether the plea of unjust enrichment under Section 11B could justify the rejection.

Analysis: The earlier order had required the authority to determine the average production for the relevant preceding five years and then compute the rebate on excess production in accordance with Clause (2) of the notification. The impugned order did not show that this exercise had been undertaken, nor did it disclose reasons showing how the claim was found to be inadmissible under the notification. The subsequent reliance on unjust enrichment under Section 11B could not sustain the order because that ground did not appear in the impugned decision and the authority had not complied with the binding earlier directions.

Conclusion: The rejection order was unsustainable and was quashed. The matter was remitted to the excise authority for a fresh decision in accordance with the earlier directions and the court's observations.

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