Unjust enrichment in excise refund fails when duty paid under protest is not passed on and subsequent recovery is unproved.

Refund of excise duty paid after clearance under protest was held not to attract unjust enrichment where the assessee sought reimbursement from the Railways and reimbursement was expressly refused. On those facts, the assessee discharged the initial burden of showing that the duty incidence had not been passed on. The revenue could not sustain transfer of the refund to the Consumer Welfare Fund without evidence of actual subsequent recovery from the customer. The presumption of passing on the burden therefore failed, and the refund was ordered with consequential relief.

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Issues: Whether the refund claim was liable to be transferred to the Consumer Welfare Fund on the ground of unjust enrichment and, in particular, whether the incidence of duty had been passed on to the customer.

Analysis: The duty was paid after clearance of the goods under protest, so there was no occasion for the assessee to have recovered it at the time of clearance. On demand being raised, the assessee sought reimbursement from the Railways, but the Railways expressly ed payment of excise duty. In these circumstances, the assessee discharged the initial burden of showing that the duty burden had not been passed on. If the revenue still wished to rely on unjust enrichment, it was required to produce evidence that the duty had in fact been recovered subsequently. In the absence of such evidence, the presumption of passing on the incidence could not be sustained.

Conclusion: The refund was not hit by unjust enrichment and the transfer of the amount to the Consumer Welfare Fund was unsustainable. The finding of the Commissioner (Appeals) was set aside and the refund claim was allowed with consequential relief.

Final Conclusion: The assessee succeeded on the refund issue, and the duty amount was held refundable instead of being credited to the Consumer Welfare Fund.

Ratio Decidendi: Where duty is paid after clearance under protest and the customer refuses reimbursement, the assessee satisfies the burden of showing non-passing of the duty incidence unless the revenue proves actual subsequent recovery.

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