Unjust enrichment presumption does not apply when duty-paid imported scrap is captively used in manufacture and not sold as such.

The statutory presumption of unjust enrichment under Section 28D applies only where the very duty-paid goods are sold as such to a buyer. Where imported melting scrap was used captively as an input in manufacturing and not resold in that form, the presumption of passing on duty did not arise, and refund could not be denied merely because the duty formed part of manufacturing cost. The refund was therefore not barred by unjust enrichment and was allowed in favour of the assessee.

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Issues: Whether refund of countervailing duty on imported melting scrap used captively in manufacture was barred by unjust enrichment under Section 28D when the goods were not sold as such.

Analysis: The presumption under Section 28D arises only when the very goods on which duty has been paid are sold to a buyer. Where the duty-paid input is not sold as such, but is used captively in the manufacture of another product, the statutory presumption of passing on the incidence of duty does not operate. On that construction, refund cannot be denied merely because the duty-paid input formed part of the manufacturing cost of the finished goods.

Conclusion: The refund was not hit by unjust enrichment and the issue was decided in favour of the assessee.

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