Unjust enrichment governs refund claims for captively consumed goods unless the claimant proves duty incidence was not passed on.

Duty paid under protest is not hit by the six-month refund limitation, so a refund claim is not time-barred on that basis. Refund, however, remains subject to unjust enrichment: even for captively consumed goods, the claimant must prove that the duty incidence was not passed on directly or indirectly to another person. Where no such proof is produced, the appellate authority may examine and apply unjust enrichment within the refund proceedings, and refund is not admissible.

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Issues: (i) Whether the bar of limitation under the refund provision applied where duty had been paid under protest. (ii) Whether the doctrine of unjust enrichment applied to refund claims relating to captively consumed goods and whether the appellate authority could deny refund on that ground.

Issue (i): Whether the bar of limitation under the refund provision applied where duty had been paid under protest.

Analysis: The duty was admittedly paid under protest. In such a situation, the statutory six-month limitation for filing a refund claim does not operate. The original rejection of the claim as time-barred was therefore unsustainable, and the appellate authority was correct in holding that limitation did not defeat the claim.

Conclusion: The limitation bar did not apply, and this issue was decided in favour of the assessee.

Issue (ii): Whether the doctrine of unjust enrichment applied to refund claims relating to captively consumed goods and whether the appellate authority could deny refund on that ground.

Analysis: Refund admissibility remained subject to the condition that the claimant must establish that the incidence of duty had not been passed on. The show cause notice and the order-in-original had already invoked the refund framework under the governing provision, so the appellate authority did not travel beyond the scope of the proceedings by examining unjust enrichment. On merits, the principle of unjust enrichment applies even where goods are captively consumed, and refund cannot be granted unless the claimant proves that the duty burden was not passed on, directly or indirectly, to buyers of the final product. No such proof was produced.

Conclusion: The doctrine of unjust enrichment applied to the refund claim, and refund was rightly denied for want of proof that the duty burden had not been passed on.

Final Conclusion: The impugned order rejecting refund on the ground of unjust enrichment was sustained, and both appeals failed.

Ratio Decidendi: The principle of unjust enrichment governs refund claims even for captively consumed goods, and refund is not admissible unless the claimant proves that the incidence of duty has not been passed on to any other person.

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