Refund on reversal of Cenvat credit for by-product clearances held admissible; unjust enrichment could not defeat the claim.

Refund of an amount paid by reversal under the Cenvat/Central Excise credit scheme for sulphur cleared as a by-product was held admissible. The earlier remand was confined to examining unjust enrichment, so the later authorities could not reopen the substantive merits of the claim. Applying Section 11B of the Central Excise Act, 1944, the payment made by reversal of credit did not attract the bar of unjust enrichment, especially where the record showed reversal of the relevant credit and no effective evidence that the amount had been recovered from customers. The refund claim was therefore allowed and the objection on unjust enrichment failed.

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Issues: Whether the refund claim arising from reversal of amount paid under the Cenvat/Central Excise credit scheme in respect of sulphur cleared as a by-product was admissible, and whether the authorities below could re-examine the merits of the claim beyond the scope of the earlier remand, including the plea of unjust enrichment.

Analysis: The refund had earlier been held admissible on merits, with remand confined to examination of unjust enrichment. The later authorities nevertheless reconsidered the substantive eligibility of the claim, which exceeded the limited remand. The amount paid was in the nature of reversal under the credit scheme for a by-product, and the governing principle applied was that such payment does not attract the bar of unjust enrichment under Section 11B of the Central Excise Act, 1944. The record also showed reversal of the relevant credit and no effective contrary evidence that the amount had been recovered from customers.

Conclusion: The refund claim was admissible, the objection based on unjust enrichment was not sustainable, and the appellant succeeded.

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