Unjust enrichment bars excise refund where duty burden was passed on to customers under the statutory scheme.

Refund of excise duty under Notification No. 198/76-C.E. was held to be barred where the duty incidence had already been passed on to customers. The appellate authority applied the statutory unjust enrichment mechanism under Section 11B(2) of the Central Excise Act, 1944 and credited the amount to the Consumer Welfare Fund. The Tribunal distinguished the assessee's cited rebate cases as dealing with a different scheme and not governing the present refund issue. The controlling principle applied was that a refund is not payable to the assessee when the tax burden has been shifted to buyers.

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Issues: Whether the refund claim, arising under Notification No. 198/76-C.E. dated 16-6-76, was hit by the doctrine of unjust enrichment and therefore not refundable to the assessee.

Analysis: The refund had been claimed after duty collection from customers had already taken place. The appellate authority applied Section 11B(2) of the Central Excise Act, 1944 and credited the amount to the Consumer Welfare Fund. The Tribunal distinguished the authorities relied upon by the assessee, noting that those decisions concerned a different rebate scheme and did not decide the present issue of unjust enrichment. The controlling principle applied was that where duty incidence has been passed on, refund is not payable to the assessee.

Conclusion: The refund claim was barred by unjust enrichment and the assessee was not entitled to the refund.

Ratio Decidendi: A refund of excise duty is not payable to the assessee where the duty incidence has been passed on to customers, and such amount is to be dealt with under the statutory unjust enrichment mechanism.

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