Unjust enrichment in refund claims requires factual proof of passing on duty, not a presumption from captive consumption.

Refund under the duty regime could not be refused on a mere presumption of unjust enrichment arising from captive consumption. The record indicated that the assessee claimed payment under protest, relied on gate passes showing captive use, and said the explanation for not filing a chartered accountant's certificate had not been examined. Because the authorities did not undertake a factual enquiry into whether the duty incidence was actually passed on, the refund denial lacked a proper basis. The matter was therefore remanded for fresh consideration after hearing both sides and determining unjust enrichment on the facts.

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Issues: Whether the refund claim could be rejected on the ground of unjust enrichment without examining the factual material relating to passing on of the duty incidence.

Analysis: The refund was denied on the assumption that, in a case of captive consumption, the duty burden necessarily stood passed on and the sanction of refund would result in unjust enrichment. The record, however, showed that the assessee had asserted that the duty had been paid under protest, that the relevant gate passes reflected captive use, and that the explanation for not producing a chartered accountant's certificate had not been examined. The authorities below did not undertake any factual enquiry into whether the incidence of duty had actually been passed on, although that aspect was central to the applicability of unjust enrichment under the refund provisions.

Conclusion: The rejection of refund could not be sustained without a factual determination on unjust enrichment, and the matter required fresh consideration by the original authority.

Final Conclusion: The order was set aside and the refund dispute was remanded for a fresh decision after hearing both sides.

Ratio Decidendi: A refund claim cannot be refused on the ground of unjust enrichment merely on a presumption from captive consumption; the authority must first determine on the facts whether the incidence of duty was actually passed on.

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