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4. The learned consultant for the appellant submits that they are manufacturers of steel pipes coated with cement which they have supplied to the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) and they were entitled to the benefit of exemption notification 06/2006 dated 01.03.2006. This exemption notification required a Certificate to be issued by the Collector / District Magistrate / Dy. Commissioner to the effect that such goods are cleared for intended use as specified in the notification and they have produced such Certificate. After examining the certificate and the records which they have submitted, the lower authority vide Order-in-Original No. 24/2008 dated 10.11.2008 found that they were eligible for the refund. However, he also found that if they are claiming the exemption notification they are required to reverse the CENVAT credit in respect of inputs availed, contained in the finished goods and work-in-progress as per Rule 11 (3) of CCR, 2004. After adjusting this amount and some interest payments, the lower authority had sanctioned them a net refund of Rs. 20,15,500/- as opposed to their claim of Rs. 64,08,609/-. It is his submission that in terms of Rule 11 (3) they were required to reverse the amount of credit on the inputs and finished goods lying in stock on the date on which they started availing the exemption notification i.e., on 01.03.2007. Therefore, they are required to reverse the amounts lying in stock on this date. Instead, the Asst. Commissioner had shifted this date to 21.04.2007 i.e., date on which they started paying duty through PLA without any legal basis. This defect was rectified by the first appellate authority vide Order-in-Appeal No. 06/2009 dated 27.02.2009. Thus, on merits they are entitled to the benefit of the exemption notification and this is not in dispute. However, when they approached the Asst. Commissioner with a letter seeking refund of the differential amount in consequence of Order-in-Appeal No. 06/2009, he did not sanction the sum stating the claim to be premature on the grounds that another appeal ST/1017/2010 filed by them is pending with the CESTAT. Aggrieved by this rejection as premature they filed an appeal before the first appellate authority who vide Order-in-Appeal No. 112/2011 went beyond the scope of their appeal and held that the entire refund claim including what was already sanctioned and paid to them was hit by the grounds of unjust enrichment. Thus, in both these appeals the following three issues need to be decided.

6. On the question of CENVAT credit under Rule 11 (3) of CCR, 2004 the original authority had wrongly reckoned the cut off date as 21.04.2007 which should be 28.02.2007, since they started claiming the benefit of this exemption notification with effect from 01.03.2007. There is nothing in Rule 11 (3) which entitles the Asst. Commissioner to change the cut off date. The first appellate authority has correctly rectified this mistake.

7. On the question of unjust enrichment learned consultant would submit that their contract with HMWSSB is a comprehensive contract of the entire project for the full amount. The contract which they have with their client was for manufacture, supply, lowering, laying, jointing, testing and commissioning of 1600 mm dia MS gravity main with cement mortar factory in-lining and out- coating from L.B. Nagar 'X' Roads to Habsiguda 'X' Roads. As per the agreement, the price quoted is inclusive of basic price of fabrication and the price for supplying of pipes at project sites as well as price for lowering, placing, erection and testing. He would draw our attention to the statement showing the excise duty calculations for manufacturing of MS pipes in the agreement signed by their clients which shows the rate of manufacturing of MS pipes plus the excise duty and education cess thereof and thereafter deducts the excise duty and education cess paid to arrive at the amounts payable by their clients. In other words, the client confirms that they have not paid the excise duty to the appellant. Learned consultant further draws our attention to the Certificate issued by the General Manager (Engg) of the client which says "as requested by M/s L&T we had provided the break-up of supply price without excise duty i.e., base price of the pipes and the working is provided, which works out to Rs. 19,831.46/- for the cost of pipe, Rs.2318.54/- for lowering, placing, erection, testing and commissioning. The total payment made is for Rs.22,150/- as mentioned above and we have not reimbursed the ED component of pipe". He further produced before us a Certificate from M/s PRSP & Associates, Chartered Accountants dated 24.05.2011 certifying that they are absorbing the excise duty as part of their cost in the books of accounts without the same being passed on to their customers. He, therefore, submits that they may be sanctioned refund of the excise duty which they are entitled to.

(d) Whether the refund claim is hit by the principle of unjust enrichment.

10. On the first issue of eligibility of exemption notification there is no dispute that the appellant has entered into contract with HMWSSB for supply and laying of the pipes and that they had paid the duty under protest. It is also not in dispute that they have subsequently obtained the Certificate from the District Collector which has been examined by the lower authority and found in order while deciding on the refund claim. Therefore, the appellant is entitled to the benefit of exemption notification. Since the appellant is entitled to the full exemption under the notification they are required to reverse the CENVAT credit in terms of Rule 11 (3) of CCR, 2004 from the date on which they have started claiming the exemption notification. In other words, they are supposed to reverse the CENVAT credit of the inputs lying in stock and the inputs which have been gone into the goods lying in stock on that date. In this case, the date is 01.03.2007. The lower authority has erroneously shifted this date to 21.04.2007 without any legal basis. As far as the issue of unjust enrichment is concerned, the appellant has entered into a composite contract which included supply of pipes as well as laying, commissioning, etc. The bill of materials as per the contract indicates the cost of the pipes plus the applicable excise duty and determines the amount payable for the pipes after deducting the duty element. The client has also given a Certificate to the effect that they have not reimbursed any excise duty to the appellant. Further, the CA's Certificate produced by the appellant also indicated that they have absorbed the cost of excise duty paid by them and they have not passed on the same to their clients. In view of these facts and circumstances we find that the appellant has not passed on the burden of excise duty either directly or indirectly to their client. In Order-in-Appeal No. 112/2011, the learned first appellate authority has relied on the judgment of the Hon'ble Apex Court in the case of Solar Pesticides Ltd (supra) and held that unless it is proved that the appellant has not passed on the burden of the excise duty either directly or indirectly the amount should be credited to the consumer welfare fund and not given to the appellant. He, further, argues that in their books of accounts the excise duty element has been shown as a cost and therefore, he concludes that this cost must have been passed on to their client and indirectly recovered from them. However, as discussed above, in this case, the bill of materials in the contract shows that the amount to be paid per pipe includes only the basic cost of the pipe (not the excise duty) plus cost of laying the pipes, etc. This is further strengthened by the CA's Certificate produced by the appellant. In view of the above, we find that the appellant has not passed on the burden of the excise duty either directly or indirectly to their clients and satisfies the requirement to claim refund without being hit by the clause of unjust enrichment in terms of the law laid down by the Apex Court in the case of Solar Pesticides (supra). Therefore, their application for refund is not hit by the principle of unjust enrichment.