Refund under protest and unjust enrichment principles: deposit treatment avoided limitation, and no passing on defeated the defence.

A payment debited in the PLA and expressly marked as made under protest was treated as a deposit, so the limitation bar under section 11B of the Central Excise Act, 1944 did not apply. The absence of a protest endorsement in the TR-6 challan did not alter that position, and rule 233B of the Central Excise Rules, 1944 was held inapplicable because it concerns protest for future clearances rather than payment against a show cause notice for past clearances. Refund was also not defeated by unjust enrichment, as a chartered accountant's certificate and affidavit showed the duty had not been recovered from customers and there was no contrary evidence.

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Issues: (i) whether the amount paid during investigation and reflected in the PLA as paid under protest could be treated as a deposit attracting the bar of limitation under section 11B of the Central Excise Act, 1944; (ii) whether the refund was barred by unjust enrichment.

Issue (i): Whether the amount paid during investigation and reflected in the PLA as paid under protest could be treated as a deposit attracting the bar of limitation under section 11B of the Central Excise Act, 1944.

Analysis: The amount was debited in the PLA with an express endorsement that it was paid under protest. The absence of a similar endorsement in the TR-6 challan did not negate that fact. The requirement of lodging a protest letter under rule 233B of the Central Excise Rules, 1944 was held to be inapplicable because that rule governs protest for future clearances, whereas the amount in question was paid against a show cause notice for past clearances. On that basis, the payment was treated as having been made under protest and the limitation objection under section 11B did not apply.

Conclusion: The refund claim was not hit by limitation under section 11B of the Central Excise Act, 1944.

Issue (ii): Whether the refund was barred by unjust enrichment.

Analysis: The appellant produced a chartered accountant's certificate and an affidavit of the proprietor, both indicating that the amount had not been recovered from customers. The lower authorities did not discredit these documents, and there was no contrary evidence showing passing on of the incidence of duty. In these circumstances, the evidence was accepted as sufficient to show that the burden had not been passed on.

Conclusion: The doctrine of unjust enrichment did not bar the refund.

Final Conclusion: The refund claim was maintainable and the assessee was entitled to consequential relief.

Ratio Decidendi: A refund claim is not barred by limitation where the disputed payment is shown to have been made under protest, and in the absence of evidence of passing on the incidence, unjust enrichment will not defeat the refund.

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