Unjust enrichment bars excise refund where duty was passed on and a later credit note cannot by itself undo the burden.

Refund of excise duty was barred by unjust enrichment under Section 11B of the Central Excise Act, 1944 because the duty burden had been passed on at clearance. The Tribunal held that a later credit note issued to the buyer does not, by itself, displace the statutory bar or establish that the incidence of duty was retained by the assessee. The appellant's reliance on an earlier decision failed because that case involved a contract with a price-variation clause and a genuine price reduction linked to it, whereas the present purchase order fixed the price. The refund claim was therefore rejected.

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Issues: Whether refund of excise duty was admissible where the duty burden had been passed on at the time of clearance and only a subsequent credit note was issued to the buyer.

Analysis: The claim for refund was examined in the light of the doctrine of unjust enrichment under Section 11B of the Central Excise Act, 1944. The appellant had cleared goods on a firm price and, after clearance, issued a credit note to the buyer. The Tribunal held that subsequent issuance of a credit note does not, by itself, displace the bar of unjust enrichment. The earlier decision relied on by the appellant was distinguished because it proceeded on a contract containing a price variation clause and a reduction of price linked to that clause, whereas the present purchase order contained no such clause and the price was fixed.

Conclusion: The refund claim was not admissible and the issue was decided against the assessee.

Ratio Decidendi: Where excise duty has been passed on at the time of clearance, a later credit note issued to the buyer does not overcome the statutory bar of unjust enrichment unless the facts show a genuine contractual reduction of price or a comparable basis for refund.

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