Refund under the Compounded Levy Scheme is subject to unjust enrichment, and excess payment is not automatically recoverable.

Under the Compounded Levy Scheme for re-rolled products, excess payment over the prescribed liability is treated as a payment made by mistake rather than as excise duty. A refund claim under Section 11B is therefore confined to duty, and the doctrine of unjust enrichment applies to manufacturers operating under the scheme. The fact that invoices do not show a separate duty component does not, by itself, displace the statutory presumption under Section 12B. Accordingly, a refund of such excess payment is not maintainable if the incidence of duty is not shown to have been borne by the claimant.

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Issues: Whether a refund claim arising from excess payment made by a manufacturer under the Compounded Levy Scheme was maintainable under Section 11B of the Central Excise Act and whether the bar of unjust enrichment applied.

Analysis: The refund dispute arose in the context of re-rolled products governed by the Compounded Levy Scheme. The amount payable under the scheme was duty at the prescribed rate, and any amount paid over and above that liability was treated as a payment made by mistake rather than as excise duty. The invoices not showing a separate duty element did not by itself rebut the statutory presumption under Section 12B of the Central Excise Act. The doctrine of unjust enrichment was held applicable to refund claims filed by manufacturers working under the scheme, and Section 11B was confined to refund of duty.

Conclusion: The refund claim was not maintainable under Section 11B and was rightly rejected.

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