Unjust enrichment governs excise duty refunds: claimant must prove the duty burden was not passed on.

Refund of excise duty remains subject to the doctrine of unjust enrichment. A claimant must rebut the statutory presumption under Section 12B of the Central Excise Act, 1944 by proving, on evidence within its special knowledge, that the duty incidence was not passed on to any other person. Security of duty through bank guarantee does not by itself defeat unjust enrichment, particularly where the guarantee is enforced and the record contains no proof that the burden was retained by the claimant. Subsequent payment of duty does not automatically exclude the doctrine; the factual record must still establish that no passing on occurred.

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Issues: Whether the refund claim was barred by unjust enrichment where the duty amount had been secured by bank guarantee and the claimant had not established that the incidence of duty had not been passed on.

Analysis: The refund of excise duty is not an absolute right and is subject to the doctrine of unjust enrichment. The fact that duty was secured by bank guarantee did not assist the claimant on the facts because the Revenue had succeeded in the underlying dispute and the guarantees had been enforced. The Court relied on the principle that, in refund matters, the burden lies on the claimant to rebut the presumption under Section 12B of the Central Excise Act, 1944 that the duty incidence has been passed on. The claimant was required to prove, on evidence within its special knowledge, that it had not passed on the burden to any other person. The record showed no such assertion or proof. The plea that subsequent payment of duty excluded unjust enrichment was also rejected on the facts, since the claimant had knowledge of the levy and the incidence could still have been passed on.

Conclusion: The refund claim was hit by unjust enrichment and was not maintainable in favour of the appellant.

Final Conclusion: The order crediting the refund to the Consumer Welfare Fund was upheld and the appeal failed.

Ratio Decidendi: A refund claimant must affirmatively prove that the incidence of duty has not been passed on; absent such proof, the doctrine of unjust enrichment applies even where the refund is sought after appellate or court proceedings and irrespective of the manner in which the duty was initially secured.

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