Refund under Notification 108/95-CE upheld where delayed certificate did not defeat substantive exemption and unjust enrichment failed

Refund of excise duty on cement supplied to a World Bank funded road project was treated as allowable despite the certificate under proviso (C) to Notification No. 108/95-CE being produced after clearance, because the supplies were genuinely for an eligible project and the procedural timing requirement was not read so strictly as to defeat the substantive exemption. The unjust enrichment objection was also rejected because the buyer confirmed that no CENVAT credit was taken and the duty was neither reimbursed nor passed on, so the refund was held to reflect duty borne by the manufacturer alone. The appellate and original orders rejecting refund were set aside.

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Issues: (i) Whether refund of duty paid on clearances made for a World Bank assisted project was admissible under Notification No. 108/95-C.E. dated 28.08.1995 despite delayed production of the prescribed certificate; (ii) Whether the refund was barred by unjust enrichment.

Issue (i): Whether refund of duty paid on clearances made for a World Bank assisted project was admissible under Notification No. 108/95-C.E. dated 28.08.1995 despite delayed production of the prescribed certificate.

Analysis: The clearances were not disputed to be for a project funded under World Bank loan assistance. The duty had been paid by the assessee only because the certificate required under the notification was produced belatedly. The requirement of prior production of the certificate was treated as a procedural condition that could not defeat the substantive exemption when the goods were otherwise covered by the notification and the duty had actually been borne by the assessee.

Conclusion: The refund was admissible and the denial of exemption was unsustainable.

Issue (ii): Whether the refund was barred by unjust enrichment.

Analysis: The evidence on record, including the buyer's letters and the ledger material, supported the finding that the duty incidence had not been passed on and that no reimbursement or CENVAT credit had been availed by the buyer. On that basis, there was no satisfactory material to invoke unjust enrichment against the assessee.

Conclusion: The bar of unjust enrichment did not apply.

Final Conclusion: The refund rejection was set aside and the assessee was held entitled to the consequential relief flowing from the allowed appeal.

Ratio Decidendi: A procedural delay in furnishing the certificate prescribed for a conditional exemption cannot by itself defeat the substantive refund or exemption claim where the goods are otherwise covered by the notification and the duty incidence has not been passed on.

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